If a 200 billion dollar increase in government spending occurs when the Fed seeks to maintain a fixed interest rate then
A) there is no crowding out, the LM curve shifts to offset the shift in the IS curve.
B) there is no crowding out, the monetary policy is fixes as is the LM curve fixed.
C) crowding out is assured since monetary policy is fixed.
D) crowding out is assured since the Fed will accommodate the spending increases.
A
Economics
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