Economics Today (19th Edition)
19th Edition
ISBN: 9780134478777
Author: Roger LeRoy Miller
Publisher: PEARSON
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Question
Chapter 13, Problem 13.1LO
To determine
The effects of discretionary fiscal policy as per Keynesian model.
Expert Solution & Answer
Explanation of Solution
When the government uses its discretionary fiscal policy, it uses its tool of government spending and government
Consider a case, where government uses expansionary fiscal policy to increase the real GDP. The government will increase government expenditure or reduces taxes or use a combination of both. The use of expansionary fiscal policy by government shifts the IS curve to the right from IS to IS’. Note that, the LM curve is horizontal because we are dealing with Keynesian
Economics Concept Introduction
Introduction:
Discretionary Fiscal Policy: It is a tool used by the government to achieve equilibrium level of GDP during different economic situations. The policy mainly focuses on government spending and its taxation tools.
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Chapter 13 Solutions
Economics Today (19th Edition)
Ch. 13.D - Prob. 1PCh. 13.D - Prob. 2PCh. 13.D - Prob. 3PCh. 13 - Prob. 13.1LOCh. 13 - Prob. 13.2LOCh. 13 - Prob. 13.3LOCh. 13 - Prob. 13.4LOCh. 13 - Prob. aFCTCh. 13 - Prob. bFCTCh. 13 - Prob. 1CTQ
Ch. 13 - Prob. 2CTQCh. 13 - Prob. 1FCTCh. 13 - Prob. 2FCTCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prob. 10PCh. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22P
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