Suppose that the government wants to raise investment but keep output constant. In the ISLM model, what

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Suppose that the government wants to raise investment but keep output constant. In the IS–LM model, what mix of monetary and fiscal policy will achieve this goal? In the 1980s, the Canadian government ran budget deficits while the Bank of Canada pursued a tight monetary policy. What effect should this policy mix have?
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Macroeconomics

ISBN: 978-1464168505

5th Canadian Edition

Authors: N. Gregory Mankiw, William M. Scarth

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