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Aggregate Demand Policy

It is there are many other possible

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Unformatted text preview: ithout generating inflation) is difficult to estimate • We do have ways to get a rough idea of where it is There are many other possible interrelationships in the economy that the model does not take into account • There are two ways to think about the effectiveness of fiscal policy: in the model and in reality • The effectiveness of fiscal policy depends on the government’s ability to perceive and to react appropriately to a problem...
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