Question: Please give a detailed answer question 2 in the medium term, the economic growth forecast for country XYZ has fallen from 5% to 2.1%. Much

Please give a detailed answer

question 2

in the medium term, the economic growth forecast for country XYZ has fallen from 5% to 2.1%. Much of government's expenditure is financed by debt and the government debt to GDP ratio is expected to rise to 93% in by 2023, well above its targeted debt to GDP ratio of 60%.As a result, fiscal policymakers have proposed "fiscal austerity".

What isfiscal austerity? In the Keynesian model under the framework of the aggregated demand, if the fiscal austerity is implemented as proposed in country XYZ, what effect will this have on output and government debt share to the gross domestic product?

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