Question:
When would the 2 Types of Fiscal Policy be Deployed? -Why?
Author: eric_galvaoAnswer:
-Loose Fiscal Policy will be deployed when a Recession is in Place, or as Negative Output Gap is Present. Economic Growth will Increase and Unemployment will Sink. But Inflation and the Current Account will Worsen -Tight Fiscal Policy will be used when a Boom or Positive Output Gap is Present. Economic Growth and Employment will tank but Inflation and the Current account will be Better off
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