Explain How an Increase in Government Spending Would Affect the DD-AA

question 14

Essay

Explain how an increase in government spending would affect the DD-AA schedule in the short run.

Analyze the impact of automatic stabilizers on budget deficits.

Evaluate the relationship between federal budget deficits and trade deficits.

Grasp the implications of discretionary fiscal policy on the economy.

Understand how deficits resulting from discretionary fiscal policies affect interest rates and the sale of government securities.