Assume That the Economy Is at Full Employment

question 131

Essay

Assume that the economy is at full employment.
a)Explain the effect to the economy if there is an increase in foreign income.
b)Explain how countercyclical fiscal policy will adjust the economy back to full employment.

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Definitions:

Positive

A term indicating the presence of or addition to something, often used in a favorable or optimistic sense.

Relation

In mathematics and computer science, it is a set of ordered pairs, showing how two sets of objects are related to each other.

Supply

The total amount of a product or service that is available to consumers.

Quantity

The amount or number of a material or immaterial item counted or measured.