Suppose there is a downward sloping is curve and an upward sloping fed rule curve that intersect at interest rate r superscript star and aggregate output upper y superscript star. what happens to the equilibrium values of the interest rate and output when there is a decrease in government spending (g) with the fed changing the money supply (ms) by enough to keep interest rates constant?
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Suppose there is a downward sloping is curve and an upward sloping fed rule curve that intersect at...
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