Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 18, Problem 9QP
To determine
Explain whether the given statement is agreeable or not and if it is agreeable, explain why.
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When the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy? Is it better to concentrate on aggregate demand or aggregate supply? Why?
What policy might the federal government implement with regard to taxes and spending to help stop the economy from falling into recession?
Suppose the government implements contractionary fiscal policy. As a result, the inflation rate will likely _____ and the real growth rate will likely _____ in the short run.
Rise or fall?
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