Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 14

KEY QUESTION What are government's fiscal policy options for ending severe demand-pull inflation Use the aggregate demand-aggregate supply model to show the impact of these policies on the price level. Which of these fiscal options do you think might be favored by a person who wants to preserve the size of government A person who thinks the public sector is too large