General equilibrium is a situation in which all markets in an economy are simultaneously in equilibrium...
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General equilibrium is a situation in which all markets in an economy are simultaneously in equilibrium (both the good market and the money market are in equilibrium, as shown below). Now suppose the U.S. economy is shown at the intersection of the IS and LM curves and President Joe Biden passed his infrastructure bill of 1.2 Tn, which should be considered as an expansionary fiscal policy. Please use the graph below to explain how such a bill may affect the economy in the long run and short run, in terms of price level P, output Y and interest rate r. Please also add the AD-AS analysis with your argument, if needed. FE LM * IS Y General equilibrium is a situation in which all markets in an economy are simultaneously in equilibrium (both the good market and the money market are in equilibrium, as shown below). Now suppose the U.S. economy is shown at the intersection of the IS and LM curves and President Joe Biden passed his infrastructure bill of 1.2 Tn, which should be considered as an expansionary fiscal policy. Please use the graph below to explain how such a bill may affect the economy in the long run and short run, in terms of price level P, output Y and interest rate r. Please also add the AD-AS analysis with your argument, if needed. FE LM * IS Y
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Related Book For
Macroeconomics Principles Applications And Tools
ISBN: 9780134089034
7th Edition
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
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