MGEA06H3 Lecture Notes - Shortage, Royal Aircraft Factory F.E.2

31 views3 pages
selahanna2005 and 40086 others unlocked
MGEA06H3 Full Course Notes
2
MGEA06H3 Full Course Notes
Verified Note
2 documents

Document Summary

Chapter 23: output and prices in the short run [cont"d] An increase in ae would lead to an increase in y*. It depends on the slope of the as curve. Y* changes by a larger amount if the as is flat. Since changes in t, tr and g affect ae, the above analysis helps the government to design and implement fiscal policy: The slope of as determines how much y* will change when there is a change in fiscal policy. If as is flat, a given change in fiscal policy will lead a relatively large in y and a small. If as is steep, the same change in fiscal policy will lead to a relatively small in y and a large in p. The slope of the as curve is critical in determining the magnitude of the policy required to get the economy back to yfe: If as is steep, a large change in fiscal policy is needed.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

Related Questions