ʺEuropean Economic Recovery Planʺ
ʺThe European Commission urged EU governments to jointly combat the economic slowdown with 200 billion euros $256 billion) in spending and tax cuts to boost growth and consumer and business confidence.ʺ The plan ʺ...would see the 27 EU governments spend 1.5 percent of the blocʹs gross domestic product to halt the slowdown that has already pushed some European nations into recession.ʺ
The plan is expected to

Question

Quizplus · Accepted Answer

The plan's goal is to boost growth and consumer and business confidence by increasing spending and tax cuts. This will shift the aggregate demand (AD) curve rightward, increasing real GDP and potentially reducing the recessionary gap. The plan does not mention the use of the autonomous tax multiplier, inflationary gap, or decreasing the price level.