A Keynesian economist is recommending an increase in government spending and an increase in the money supply to reduce unemployment during a recession. Using the IS-LM framework what will be the results of this policy combination?
An increase in GDP with an indeterminate impact on the interest rate.
An increase in GDP, a decrease in the price level, and an increase in the real wage.
A decrease in GDP and an increase in the interest rate.
An indeterminate impact on GDP and a decrease in the interest rate.