Question
Ifpolicymakers were to use fiscal policy to actively stabilise the economy, in which direction should they move government spending and taxes? Explain your answer with
- Ifpolicymakers were to use fiscal policy to actively stabilise the economy, in which direction should they move government spending and taxes? Explain your answer with appropriate graphs.
(a) The Covid-19 pandemic reduces business investment and household consumption. (2 marks)
(b) OPEC raises the price of crude oil. (2 marks)
(c) A severe drought decreases labour productivity in agricultural sector. (2 marks)
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Macroeconomics Principles Applications and Tools
Authors: Arthur O'Sullivan, Steven Sheffrin, Stephen Perez
9th edition
978-0134089027, 134089022, 978-0134420684
