Are the following statements True, False or Uncertain? Justify you answer for each of the statements. If the government increases both Tax and Expenditure by equal amount, then there will be no increase in income in the Keynesian model.  If money demand does not depend on interest, them LM curve is vertical.

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Q: Interest mate IS Y (Figure 1) Income, output (Figure 3) LM IS LM Expenditure (planned, PE actual, Y)…

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Q: 2. The graph below shows the AD-AS model in short-run equilibrium at a price level, Po, and a level…

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Q: Money demand and money supply determine the rate of interest in the Keynesian model. O True O False

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A:

Q: What will happen to AD curve if a cut back in government spending G is accompanied by (i) a fall…

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Q: and inflationary

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