Consider a country described by the IS-LM model (with flat LM curve) at the equilibrium income. a) Describe how the gove

[answerhappygod]

Consider a country described by the IS-LM model (with flat LM
curve) at the equilibrium income.
a) Describe how the government can perform a fiscal contraction
and its effect on equilibrium income, on investment and on debt to
GDP.
b) Starting from the initial equilibrium, suppose that the
government wants to reduce its deficit, keeping the income
unaltered. Is there a fiscal-monetary poilcy mix that can be
carried out to achieve this objective?
Consider a country described by the IS-LM model (with flat LM
curve) at the equilibirum income (lets call it initial
equilibrium)
a) Describe how the government can perform a fiscal expansion
and the effects of a fiscal expansion on the equilibrium income, on
investment, on private savings and on deficit.
b) Starting from the initial equilibrium, suppose that the
government is running a large deficit and wants to reduce it
without triggering a recession. Which fiscal-monetary policy mix
can be used to achieve this goal in the context of the model?