Answer to Question #63320 in Macroeconomics for Olivis Heyno
How can I graphically show how a combination of fiscal and monetary policies could be used to reduce output without changing the interest rate?
We should use such combination of fiscal and monetary policies, for which taxes will be decreased, government purchases will be decreased and the decrease in money supply may be used too to reduce output without changing the interest rate. In this case aggregate demand will decrease (AD curve will shift to the left), so the total output will decrease.
Thank you so much! It works amazing!!!! I want to say a personal thank you; "Thank you to every individual that had a role in helping this assignment, you all have helped me so much!" I really appericate all your help. If you have a review for me to write, I'd be more than happy to write you/this website a great review. Hope everyone of you have a great day! Thanks again!