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Fiscal Policy Response: Student must recommend the Federal Government use Expansionary Mode of Fiscal Policy to...

Fiscal Policy Response: Student must recommend the Federal Government use Expansionary Mode of Fiscal Policy to deal with the Recession. The student must recommend several specific items for the government to increase its spending in order to inject money into markets and get businesses spending money, as well as putting labor back to work to put money in their pockets to spend as well. Additionally, student must recommend the government LOWER PERSONAL AND BUSINESS INCOME TAXES. This will make both Consumer and Gross Private Domestic Investment Spending INCREASE. As three parts of total spending increase, AD shifts to the right, real GDP increases, which causes unemployment to decrease. If these work as stated, the economy will move into recovery in the business cycle.

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Rahul Sunny answered 7 months ago
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