Question
Suppose a country is facing a recessionary gap 1.Graph the current economic situation using Aggregate demand and Aggregate supply, short run and long run (1
Suppose a country is facing a recessionary gap
1.Graph the current economic situation using Aggregate demand and Aggregate supply, short run and long run (1 graph)
2. The Central wants to use monetary policy to stabilize the economy. What kind of policy should it follow? How will it impact bond prices, interest rates, investment, the exchange rate, net exports, real GDP, and the price level. Illustrate your analysis graphically with explanations.
3. The Government wants to use Fiscal policy to stabilize the economy. What kind of policy should it follow? How will it impact real GDP, and the price level, Public Budget. Illustrate your analysis graphically with explanations.
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