Fiscal policies for economic growth

Name: Fiscal policies for economic growth
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Fiscal policies such as increasing government spending, reducing taxes, and increasing transfer payments can lead to an increase in aggregate demand and economic growth. This can result in an increase in potential GDP, a rightward shift in the LAS curve, and an increase in the quantity and quality of inputs as firms invest more. However, these policies can also lead to inflation and a falling price level in the short-run.

Fiscal Policies for Economic Growth