Question

Using Is-LM model,show that fiscal policy is more effective at low rate of interest and low level of Income, while monetary policy is more effective when the levels of income and rate of interest are high.?​

Answer 1

I HOPE THIS ANSWER WOULD HELP YOU A LOT IF MARK ME AS BRAINLIEST:

Fiscal policy is more effective, the flatter is the LM curve, and is less effective when the LM curve is steeper. When the IS curve shifts upwards to IS1with the increase in government expenditure, its impact on the national income is more with the flatter LM curve than with the steeper LM curve.