3. (For students who were assigned Chapter 11) Use the aggregate expenditures model to show how government

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3. (For students who were assigned Chapter 11) Use the aggregate expenditures model to show how government fiscal policy could eliminate either a recessionary expenditure gap or an inflationary expenditure gap (Figure 11.7). Explain how equalsize increases in G and T could eliminate a recessionary gap and how equal-size decreases in G and T could eliminate an inflationary gap. LO13.1

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Macroeconomics

ISBN: 9781259915673

21st Edition

Authors: Campbell McConnell, Stanley Brue , Sean Flynn

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