ECS2602 ASSIGNMENT 3 ONLINE ASSESSMENT SEMESTER 2 POSSIBLE QUESTIONS AND SOLUTIONS This question is based on the following diagram of an IS-LM model for an open economy An expansionary fiscal policy, for example an increase in government spending (G), causes an increase in the demand for goods (Z) and the level of output and income (Y) and consequently ... Study the following question and complete the sentence: A decrease in the money supply causes ...