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Initial government spending - PowerPoint PPT Presentation

Unit 3: Aggregate Demand and Supply and Fiscal Policy

Unit 3: Aggregate Demand and Supply and Fiscal Policy. 1. Review. Explain how to show full employment, inflation, and unemployment on the PPC. Explain how to show full employment, inflation, and unemployment on the Business Cycle. Draw an Inflationary Gap with your elbow.

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Fiscal Policy Practice

Fiscal Policy Practice. Draw and Practice. Congress uses discretionary fiscal policy to the manipulate the following economy (MPC = .9). What type of gap? Contractionary or Expansionary needed? What are two options to fix the gap? How much needed to close gap?. LRAS. AS. P 2. Price level.

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Initial government spending - PowerPoint PPT Presentation

Unit 3: Aggregate Demand and Supply and Fiscal Policy

Fiscal Policy Practice