In the dynamic model, changes in fiscal policy are captured in changes in the:
A)natural rate of interest.
B)expected rate of inflation.
C)demand shock.
D)natural level of output.

Name: In the dynamic model, changes in fiscal policy are captured in changes in the: A)natural rate of interest. B)expected rate of inflation. C)demand shock. D)natural level of output.
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Question

Quizplus · Accepted Answer

In the dynamic model, fiscal policy changes are typically reflected as demand shocks, affecting aggregate demand and economic output.

In the Dynamic Model, Changes in Fiscal Policy Are Captured