Suppose a government runs a contractionary fiscal policy in order tomoderate the effects of a mining boom

 Suppose a government runs a contractionary fiscal policy in order tomoderate the effects of a mining boom. This results in a budget surplus.Explain whether the government should use the surplus to retire governmentdebt, provide a tax cut or leave the surplus revenue in a fund.2. Explain how the banking system contributes to the money supply.3. Compare the net exports effect of an expansionary fiscal policy and anexpansionary monetary policy. In your answer, clearly explain the reason forthe difference (if any) between the effects.

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