Answer the following questions using TRUE, FALSE or UNCERTAIN.
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Answer the following questions using TRUE, FALSE or UNCERTAIN. Make sure you provide a brief explanation for each of your answers. Your score will largely reflect the quality and relevance of your explanation.
(i) In the IS-LM model, equilibrium output is determined in the goods market, while equilibrium interest rate is determined in the bond market.
(ii) A $100 million increase in defense spending will have the same impact on equilibrium output as does a $100 million tax cut.
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