recession -- ��1. government purchases2. transfer payment3. cut taxesself correction��recession - wage- AS- shifts AS to right����keep the wage high��minimum wage, efficiency wage, labor unionsupply sider��1. cut income taxes. labor- AS shifts to right��2. cut tax on savings income 3. cut tax on capital gains taxsave- investment- physical capital- AS shifts to right������4. cut corporate taxresearch fee- AS shifts to right��autonomic stabilizers��1.tax. 2.unemployment insurance. 3.welfare. 4.social securitycost push inflation - AD����demand pull inflation - AS����Regan��same price level, produce more1.cut tax(4) - shift AS��2.autonomous spending- AD����problem - debtmoney��divisible, protable, durable, stable(difficult to copy)commodity money - have own intrinsic value
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