(For students who were assigned Chapter 9) Use the aggregate expenditures model to show how government fiscal...
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(For students who were assigned Chapter 9) Use the aggregate expenditures model to show how government fiscal policy could eliminate either a recessionary expenditure gap or an inflationary expenditure gap (Figure 9.7). Explain how equal-size increases in G and T could eliminate a recessionary gap and how equal-size decreases in G and T could eliminate an inflationary gap.
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