State how and why each of the following affects the AD curve: a. An increase in government
Question:
State how and why each of the following affects the AD curve:
a. An increase in government purchases.
b. A tax increase.
c. An increase in planned investment spending by firms caused by optimism about the future.
d. A decrease in the Fed’s inflation target.
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a An increase in government purchases will cause planned spending and therefore output Y ...View the full answer
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