Fiscal policy can affect aggregate demand. 1. Explain how changes in government purchases and taxes affect aggregate
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1. Explain how changes in government purchases and taxes affect aggregate demand.
2. Describe the Keynesian prescription to cure a recessionary gap.
3. Describe the Keynesian prescription to cure an inflationary gap.
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1 An increase in G increases AD and shifts the AD curve rightwa...View the full answer
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