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Why Does Fiscal Policy in the Globalized AS/AD Model Have

question 49

Essay

Why does fiscal policy in the globalized AS/AD model have a different effect than fiscal policy in the standard AS/AD model?


Definitions:

Holiday Lighting

The practice of installing lights and other decorative lighting during holidays; not inherently economic but can involve significant expenditure and economic activity.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction.

Government Tax

is a compulsory financial charge or levy imposed by a government on individuals or corporations to fund public expenditures.

Allocation of Resources

The process of distributing available resources among various uses or projects in an effort to achieve strategic goals and efficiency.

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