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

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

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Consider a country described by the IS-LM model (with flat LM
curve) at the equilibrium income.
a) Describe how the central bank can perform a contractionary
monetary policy and its effect on equilibrium income, on investment
and on debt to GDP.
b) Starting from the initial equilibrium, please describe a
policy mix which would allow to increase investment and decrease
consumption without altering the income.
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