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ec5 - recession 1 government purchases 2 transfer payment 3...

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recession -- �� 1. government purchases 2. transfer payment 3. cut taxes self correction �� recession - wage - AS - shifts AS to right �� �� keep the wage high �� minimum wage, efficiency wage, labor union supply sider �� 1. cut income taxes. labor - AS shifts to right �� 2. cut tax on savings income 3. cut tax on capital gains tax save - investment - physical capital - AS shifts to right �� �� �� 4. cut corporate tax research fee - AS shifts to right �� autonomic stabilizers �� 1.tax. 2.unemployment insurance. 3.welfare. 4.social security cost push inflation - AD �� �� demand pull inflation - AS �� �� Regan �� same price level, produce more 1.cut tax(4) - shift AS �� 2.autonomous spending - AD �� �� problem - debt money �� divisible, protable, durable, stable(difficult to copy) commodity money - have own intrinsic value
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