In 2008, Japanʹs government approved a $1 trillion fiscal stimulus plan comprised of both tax cuts and government expenditure increases. As a result,

Question

Quizplus · Accepted Answer

The fiscal stimulus plan comprised of tax cuts and government expenditure increases would lead to an increase in aggregate demand, shifting the curve to the right. This would lead to an increase in real GDP and potentially inflation. It would not impact the long-run aggregate supply curve, as this is determined by factors such as capital, labor, and technology.

In 2008, Japanʹs Government Approved a $1 Trillion Fiscal Stimulus