Suppose the economy has an inflationary gap. What fiscal policies might be used to close the gap?

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Suppose the economy has an inflationary gap. What fiscal policies might be used to close the gap? Using the model of aggregate demand and aggregate supply, illustrate the effect of these policies.

Explain with the help of a graph.

Related Book For answer-question

Principles of economics

ISBN: 978-0538453042

6th Edition

Authors: N. Gregory Mankiw

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Posted Date: Feb 14, 2023 11:51 PM

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Suppose the economy has an inflationary gap. What fiscal policies might be used to close the gap?

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Principles of economics

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