7. The following problems combine effects of government policy actions in the real credit market and the real goods market. In each market, show the
7. The following problems combine effects of government policy actions in the real credit market and the real goods market. In each market, show the shift in the appropriate curves. Below the graph, state the change, either increase, decrease, or no change in r, RC, P, and RGDP a. With the economy plunging into recession, the government enacts expansionary fiscal policy greatly increasing spending. P S AS GDP Price Index D RC Real GDP Answer for r, RC, P, and RGDP: b. With the economy in severe recession, the central bank lowers purchases trillions of dollars of financial securities in the open market. P S AS GDP Price Index D RC Real GDP Answer for r, RC, P, and RGDP: Activate Windows Go to Settings to activate Windows
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