In an expansionary fiscal policy to overcome the current recession, the Federal Government increases its spending to impprove the nation's physical infrastructure (roads, airports, seaports, airports, etc)
A-Show graphically what happens to equilibrium income, interest rate, and price level using the Aggregate Demand Aggregate Supply and the IS-LM framework
I need help graphing this problem.
When there is an increase in government spending, the IS curve shifts to
the right. The amount of the income increase depends on the marginal
propensity to consume through the multiplier effect
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