Question
Suppose an imaginary economy is experiencing weakening sales and production in combination with lower consumer confidence, resulting in weaker aggregate demand. Additionally, unemployment has been
Suppose an imaginary economy is experiencing weakening sales and production in combination with lower consumer confidence, resulting in weaker aggregate demand. Additionally, unemployment has been rising rapidly while inflation has remained steady around the central bank's target of 2%.
List two fiscal policy options (and the direction of change in each policy) that can be used to stabilize the economy.
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