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Homework answers / question archive / The federal government wants to "cool down" consumers' expenditure
The federal government wants to "cool down" consumers' expenditure. Use the IS- LM framework to answer the following questions: a) List all the tools the government can use to achieve a lower value of C; b) How excactly each tool needs to be changed to lower C? c) What is the effect of the policy on the interest rate? c) what is the effect of the policy on GDP?
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