How would I do b and c? 2 2157%+6. What fiscal policy actions would you recommend in the following instances? (Draw a diagramthat depicts your answer for each part of the question.)The economy begins at potential output, but foreign economies slow dramatically.а.b. The economy has been operating above potential output and inflationary pressures rise.с.A new technology is invented that significantly raises potential output.d. You are told that the economy is significantly below its potential output and that thefollowing will happen next year: World inçome will fall significantly and the price of oil willrise significantly (Assume that the U.S. is an oil importer.)

Fiscal policies are the measures used by the government to affect the economy. The major fiscal…

6. What fiscal policy actions would you recommend in the following instances? (Draw a diagram that depicts your answer for each part of the question.) The economy begins at potential output, but foreign economies slow dramatically. а. b. The economy has been operating above potential output and inflationary pressures rise. A new technology is invented that significantly raises potential output. с.

6. What fiscal policy actions would you recommend in the following instances? (Draw a diagram that depicts your answer for each part of the question.) The economy begins at potential output, but foreign economies slow dramatically. а. b. The economy has been operating above potential output and inflationary pressures rise. A new technology is invented that significantly raises potential output. с.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter24: Fiscal Policy

Section: Chapter Questions

Problem 5P

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How would I do b and c?

2 2
157%
+
6. What fiscal policy actions would you recommend in the following instances? (Draw a diagram
that depicts your answer for each part of the question.)
The economy begins at potential output, but foreign economies slow dramatically.
а.
b. The economy has been operating above potential output and inflationary pressures rise.
с.
A new technology is invented that significantly raises potential output.
d. You are told that the economy is significantly below its potential output and that the
following will happen next year: World inçome will fall significantly and the price of oil will
rise significantly (Assume that the U.S. is an oil importer.)

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