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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