{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

10SQ11 - b Which type of fiscal policy would move this...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ. 1A. Quiz 10. (Take home). Due: Wed. 05/12/10. (Turn in your answer in the beginning of the class) Name: _________________________. ID: _________________________. P LAS SAS 1 P 1 E 1 AD 1 Y Y 1 Y P The graph shows the current macroeconomic situation for the economy of Econland. You have been hired as an economic adviser to help the economy move to full- employment equilibrium, i.e., potential GDP, Y p . a. Is Econland facing a recessionary gap or inflationary gap? Explain your answer. [2]
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: b. Which type of fiscal policy would move this economy to potential output? What are some examples of such policies? Also show your answer graphically. [5] c. Which type of monetary policy would close this gap? How could the Fed use three main policy tools to achieve the objective of Econland? [5]...
View Full Document

{[ snackBarMessage ]}