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
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Should policy makers also try to offset positive shock to aggregate demand? Why
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