PLEASE HELP Use the appropriate graphs to show the effects of an expansionist fiscal policy (an increase
Question:
PLEASE HELP
Use the appropriate graphs to show the effects of an expansionist fiscal policy (an increase in government spending) on output, labor, real interest rates, and real wages. Explain all changes with words and also the effects on consumption and investment.
Assume that the economy is initially in equilibrium. Draw all the four graphs utilized in the lecture videos to represent the Real Intertemporal Model. Make sure to label the axes (3 points). Assume that the output demand curve's effect is stronger than the effect on the output supply curve. Show the effects of an increase in government spending on output, labor, real interest rates, and real wages (6 points). Explain with words (3 points). Explain with words what is the effect on consumption and investment (4 points).