How does a fiscal policy affect the AS-AD curve

Assignment Help Business Economics

Reference no: EM131163481

How does a fiscal policy affect the AS-AD curve? Lets say for example have an equilibrium output of 1600 and full employment level of 1200 meaning i have an inflationary gap of 400 so i might want to fix this by applying a fiscal policy that increases taxes. Would this shift the AS in any way or just the AD. Also what are the possible side effects of a fiscal policy?

Reference no: EM131163481

Questions Cloud

Unethical traders in the financial market : The financial crisis was brought on by unethical traders in the financial market. To prevent this from happening again traders and CEOs need to understand the principals of corporate governance and ethics."

What is the Pareto efficient level of G : Cindy and Dan share a public good G. Cindy’s preferences are Uc = xc + 2G1/2, and she has income mc. Dan has preferences Ud = xd + 8G1/2, and he has income md. Both x and G have a price of 1. What is the Pareto efficient level of G? Instead Cindy wou..

Issues impact the finncial performance : i. What makes this a success failure and why? What are the issues? ii. Why are these issue and how do the issues mpact the finncial performance? iii. Find at leat one problem, what ar the symptoms and hw can they become opportunities?

Identifies importance of one of four propositions discussed : Write a paper of approximately three pages (double-spaced, single sided) that identifies the importance and application of one of the four propositions discussed by the authors to business service organizations.

How does a fiscal policy affect the AS-AD curve : How does a fiscal policy affect the AS-AD curve? Lets say for example have an equilibrium output of 1600 and full employment level of 1200 meaning i have an inflationary gap of 400 so i might want to fix this by applying a fiscal policy that increase..

Difference between media fluency and media literacy : What does it take to effectively use all media now, whether separately or just as part of being connected? In other words, what is the difference between media fluency and media literacy?

Foreign aid worsening our budget deficit : Is America obligated to help poor countries? Is foreign aid worsening our budget deficit?

Define and compare and contrast - innovation and design : Define and compare and contrast: innovation, design and creativity. Describe the importance of the three in meeting organizational objectives

Business fluctuations refer : Business fluctuations refer to. the ups and downs in overall business activity measured by changes in national? income, employment and the price level.

User Account

All Pages