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3) What are the government's fiscal policy options for ending severe demand-pull inflation? Draw and correctly label an AD / AS graph and demonstrate one
3) What are the government's fiscal policy options for ending severe demand-pull inflation?
Draw and correctly label an AD / AS graph and demonstrate one of these changes and the effect on price levels and output of the changes.
In your problem, tell me what the size of the inflationary gap (x-axis) is and how much you would need to change taxes if you had an mpc of .75.
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