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Q. 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.
Answer: A temporarily monetary expansion will move the economy from DD1 to DD2 and output increases. A permanent financial expansion will as well shift the AA curve to the left and down. The small exchange rate appreciates that is E decreases.
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You can work on this on your own, or with one partner. If there are more than two names on the submitted work, then I will give a maximum grade of 60 to each person listed on the
why is international trade important for south africa
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briefly summaries the alternative explanation to the theory of international trade?
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what is opportunity cost
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