Gdp only raise by three quarters of the expected amount

Reference no: EM1334721

Slow GDP Growth

Please Use Original Work

Details: Assume that the economy is already in a recession, and both the President and Congress have decided to do something to restore the economy. Both agree that lowering taxes would not be a good idea, but do believe that it is in the best interest of the economy to increase government spending in defense, education & infrastructure.

The President and Congress change the budget accordingly, but after 18 months, GDP only increased by three quarters of the expected amount. What factors might be responsible for this situation?

Reference no: EM1334721

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