3. (For students who were assigned Chapter 31) Use the aggregate expenditures model to show how government
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3. (For students who were assigned Chapter 31) Use the aggregate expenditures model to show how government fiscal policy could eliminate either a recessionary expenditure gap or an inflationary expenditure gap (Figure 31.7). Explain how equalsize increases in G and T could eliminate a recessionary gap and how equal-size decreases in G and T could eliminate an inflationary gap. LO33.1
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