Consider the IS-LM model. The government wants to do fiscal policy either by raising government spending or lowering taxes. What will be the difference between these two approaches? O One will shift IS: the other will shift LM. One will raise consumption and the other will raise economic investment. O One will shift IS rightward; the other will shift IS leftward. O One is direct and the other is indirect.

Consider the IS-LM model. The government wants to do fiscal policy either by raising government spending or lowering taxes. What will be the difference between these two approaches? O One will shift IS: the other will shift LM. One will raise consumption and the other will raise economic investment. O One will shift IS rightward; the other will shift IS leftward. O One is direct and the other is indirect.

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 5CQQ

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