Aggregate Demand and Aggregate Supply - Macroeconomic Policy - policy in the face of demand shocks
4 important questions on Aggregate Demand and Aggregate Supply - Macroeconomic Policy - policy in the face of demand shocks
For what 2 reasons is a policy that short-circuits and maintains the economy as its original equilibrium be desirable?
because price stability is a desirable goal, so preventing a fall in the aggregate price level is a good thing.
Do policy makes always act to offset declines in aggregate demand? Why?
In order to eliminate inflationary and recessionary gaps what policy has the most effect
Should policy makers also try to offset positive shock to aggregate demand? Why
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