Assume that the economy is in a recession. If the government were to increase spending while the Fed expanded the money supply, what would be the effect on interest rates and investment? Explain why your answer is likely to be ambiguous.

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The Answer of Assume that the economy is in a recession. If the government were to increase spending while the Fed expanded the money supply, what would be the effect on interest rates and investment? Explain why your answer is likely to be ambiguous.

Assume That the Economy Is in a Recession