zero and inflation at the target = *. n 2021, the government in power decides to lower income tax rates in a bid to boost economic growt and raise its chances to be reelected. In the context of the DAD-DAS model, we can interpret this polic as a positive value of the demand shock. . Using the line drawing tool, on graph A, draw the position of the DAD curve in 2021, relative to its position in 2020. 2. Using the line drawing tool, draw the position of the DAS curve in 2021, relative to its position in 2020 3. Using the point drawing tool, indicate the new equilibrium output gap and inflation in 2021. Graph A It I I I DAS 2020 gap Select Line Point
zero and inflation at the target = *. n 2021, the government in power decides to lower income tax rates in a bid to boost economic growt and raise its chances to be reelected. In the context of the DAD-DAS model, we can interpret this polic as a positive value of the demand shock. . Using the line drawing tool, on graph A, draw the position of the DAD curve in 2021, relative to its position in 2020. 2. Using the line drawing tool, draw the position of the DAS curve in 2021, relative to its position in 2020 3. Using the point drawing tool, indicate the new equilibrium output gap and inflation in 2021. Graph A It I I I DAS 2020 gap Select Line Point
Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles
Section: Chapter Questions
Problem 9E
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