Assume that the capital flows for the KOL State are imperfect but sensitive to interest rates. The country's economy is in external equilibrium, but is experiencing the problem of rising prices in general. You are a policy maker in that country and think that reducing government spending is more effective in tackling the problem of inflation than increasing the required reserve rate when the KOL Country adopts a fixed rate system. Discuss your opinion with the help of the IS-LM-BP model.