Fill in the blanks below. The central bank increases the money supply through an open market operation. Such a policy is called a monetary_________________________. Under this policy, at a given level of income, the interest rate_____________________and causes the LM curve to shift ________________________. On the other hand, if the government decided to increase taxes while keeping government spending unchanged, it leads to a policy of fiscal _________________________. Under such a policy, the IS curve shifts_________________________ and the output Y____________________________, as the consumption levels_________________- because of a ____________________________ in disposable income.
Fill in the blanks below.
The central bank increases the money supply through an open market operation. Such a policy is called a monetary_________________________. Under this policy, at a given level of income, the interest rate_____________________and causes the LM curve to shift ________________________. On the other hand, if the government decided to increase taxes while keeping government spending unchanged, it leads to a policy of fiscal _________________________. Under such a policy, the IS curve shifts_________________________ and the output Y____________________________, as the consumption levels_________________- because of a ____________________________ in disposable income.
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