1. Discuss the effect of fiscal policy on inflation.
2. Discuss the effect of persistent fiscal stimulus on the economy in the long run.
3. Describe the mechanism of how changes in fiscal policy affect output and prices in the economy.

Answer rating: 100% (QA)

Fiscal Policy and Inflation Fiscal policy the governments use of spending and tax levers can significantly impact inflation Heres how Contractionary p... View the full answer