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Explain: (1) What Happens to Income, Money Demand, the Interest

question 7

Essay

Explain: (1) what happens to income, money demand, the interest rate, and output when an increase in government spending is implemented and (2) what happens to the position of the LM curve as a result of the fiscal expansion if the central bank controls the interest rate.


Definitions:

Social Acceptance

The process by which an individual gains approval, inclusion, or acknowledgment within a group or society.

Nonhuman Animals

Refers to all animals except humans, highlighting the biological and psychological study of animal behavior and cognition.

Need To Belong

The desire to form and maintain close, lasting relationships with other individuals.

Social Acceptance

The approval of a social group or society, often based on adherence to group norms or standards.

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