Explain whether the following government policies affect the aggregate demand curve or the short-run aggregate supply curve
Question:
Explain whether the following government policies affect the aggregate demand curve or the short-run aggregate supply curve and how.
a. The government reduces the minimum nominal wage.
b. The government increases the size of payments for the Child Care Benefit (CCB), government transfers to families with dependent children.
c. To reduce the budget deficit, the government announces that households will pay much higher taxes beginning next year.
d. The government reduces military spending.
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a If the government reduces the minimum nominal wage it is similar to a fall in nominal wages Aggreg...View the full answer
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Related Book For 
Macroeconomics
ISBN: 978-1319120054
3rd Canadian edition
Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson
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