Re: ISI 2017 key

Posted by Akki on Jun 07, 2017; 2:28pm
URL: http://discussion-forum.276.s1.nabble.com/ISI-2017-key-tp7604137p7605095.html

Heyy...
I am pretty sure here..
Contractionary fiscal policy increases savings in both open and closed economy. To compensate for the decrease in output  we need to increase money supply (expansionary monetary policy). So, ans is c.
SOURCE: Abel and Bernanke 7th edition