A number of countries, like Greece and the United Kingdom, have in the past few years responded to growing and problematic levels of debt by introducing “austerity” policies: significant cuts to government purchases (G) combined with significant tax (T) increases. These policies have been controversial among both economists and the public. What is the long run effect of austerity on the unemployment rate?

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A: Referencehttps://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Monetary-Policy

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