Question
A) Briefly discuss the specific characteristics and evaluate the potential positive and negative effects of the fiscal policies adopted by the French Government to tackle
A) Briefly discuss the specific characteristics and evaluate the potential positive and negative effects of the fiscal policies adopted by the French Government to tackle the recession induced by the Coronavirus pandemic in 2020. B) Explain and illustrate the theoretical impact of these fiscal policies using the Keynesian Cross diagram. Explain the multiplier effect and show it in your diagram. C) Explain how the accelerator effect and time lag arguments apply to the French fiscal policy measures. D) A major pandemic forces the government to lockdown the population and reduce production in large sections of the economy for several months. Explain how this might impact the economy. Show (draw) the impact of this scenario using the Classical 4x4 diagrams and the Classical aggregate supply and demand diagram. Explain the changes (shifting elements) as well as causes and effects in the diagrams.
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