Governments fiscal policy options for an inflationary gap
Describe government’s fiscal policy options for an inflationary gap? Employ the aggregate demand-aggregate supply model to illustrate the impact of these policies on the price level.
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Options are to decrease government spending, raise taxes, or some combination of both. If the price level is flexible downward, it will drop. In the real world, the goal is to drop inflation—to keep prices from increasing so rapidly—not to decrees the price level.
Given equations describe market for widgets Demand: P = 10 - Q Supply: P = Q - 4 Q : What is Special Items of Expense Special Items of Expense: It is an expenditure category which covers nonrecurring big expenditures or special aim expenditures which usually need a separate appropriation (or else need separation for clarity).
Special Items of Expense: It is an expenditure category which covers nonrecurring big expenditures or special aim expenditures which usually need a separate appropriation (or else need separation for clarity).
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In the year of 1996, the U.S. Congress raised the minimum wage from $4.25 per hour to $5.15 per hour. Some of the people suggested that a government subsidy could help employers finance the higher wage. Assume the supply of low-skilled labour is specified by
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