Question

why does a horizontal LM curve imply that fiscal policy has a same effect othe economy as those derived in keyensian​

Answer 1

Answer:

The effectiveness of fiscal policy depends on the slope of the LM curve and the IS curve. It is more effective, the flatter is the LM curve, and is less effective when the LM curve is steeper. This is because fiscal policies lead to changes in IS curve, which gives the maximum result when LM is horizontal

Explanation:

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