You are a fiscal policy advisor:
Explain the policy recommendations you would make.
Illustrate the effect of your policy recommendation using AD/AS
analysis.
Include the size of proposed changes in either
government spending, taxes, or transfer payments.
Relate your answer to our macroeconomic goals of full
employment, price level stability, and economic growth.
Be sure to analyze each event
independently.
Circumstances:
a. Potential GDP is $17.5 trillion. Actual GDP is $16 trillion.
MPC = .5.
b. Potential GDP is $17.5...