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Title: Demonstrate how a permanent fiscal expansion will not increase output in the long run. Post by: Chako on Mar 11, 2016 Demonstrate how a permanent fiscal expansion will not increase output in the long run.
Title: Re: Demonstrate how a permanent fiscal expansion will not increase output in the long run. Post by: machukian on Apr 18, 2016 (1 ) E on Y-axis, Y on X-axis
(2 ) DD shifts right (3 ) temporary equilibrium where E lower and Y increased (4 ) permanent increase in demand caused by increase in G causes currency to appreciate: AA shifts left (5 ) therefore Y returns to original levels, E decreases even more RESULT of permanent fiscal expansion: currency appreciation, output does not change. This effect is called "crowding out." Title: Re: Demonstrate how a permanent fiscal expansion will not increase output in the long run. Post by: Chako on Apr 25, 2016 Good answer, thank you
Title: Re: Demonstrate how a permanent fiscal expansion will not increase output in the long run. Post by: machukian on May 11, 2016 Good luck
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