Using a figure show that under full employment, a temporary fiscal expansion would increase output (over-employment) but cannot increase output in the long run
What will be an ideal response?
A temporarily fiscal expansion will move the economy from DD1 to DD2, and output increases. A permanent fiscal expansion will also shift the AA curve to the left and down. The nominal exchange rate appreciates, i.e. E decreases.
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Which concept do some scholars use to explain the growth in free trade after World War II?
a. regionalization b. voluntary export restraint c. embedded liberalism d. hegemonic stability
Infant industries are:
a. manufacturing activities that make baby products. b. industries that cannot currently withstand foreign competition but are expected to grow and mature so that they can compete internationally. c. industries that can currently withstand foreign competition in the domestic market but are expected to mature into export industries. d. industries that cannot currently withstand foreign competition in either the domestic or the export market but are expected to mature into multinational firms.