Assume an economy where the government embarks on an expansionary fiscal policy, explain the effect on equilibrium and interest rate if: a. There is a crowding out of the Private sector. b. The initial expansionary fiscal Policy was accompanied by an increase in money supply explain both senarios with the aid of diagrams
Assume an economy where the government embarks on an expansionary fiscal policy, explain the effect on equilibrium and interest rate if: a. There is a crowding out of the Private sector. b. The initial expansionary fiscal Policy was accompanied by an increase in money supply explain both senarios with the aid of diagrams
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Assume an economy where the government embarks on an expansionary fiscal policy, explain the effect on equilibrium and interest rate if:
a. There is a crowding out of the Private sector.
b. The initial expansionary fiscal Policy was accompanied by an increase in money supply
explain both senarios with the aid of diagrams
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