How Large A Tax Cut Would Be Needed To Achieve The Same Increase In Aggregate Demand? How large a tax cut would be needed to achieve the same increase in aggregate demand? $12.50 billion. How can a tax cut eliminate a recessionary gap? Fiscal policy means using either taxes or government spending to stabilize the
How Do You Close An Inflationary Gap? Policies that can reduce an inflationary gap include reductions in government spending, tax increases, bond and securities issues, interest rate increases, and transfer payment reductions. Why is inflationary gap bad? When an inflationary gap occurs, the economy is out of equilibrium level, and the price level of goods
Which Of The Following Would Help A Government Reduce An Inflationary Gap? Policies that can reduce an inflationary gap include reductions in government spending, tax increases, bond and securities issues, interest rate increases, and transfer payment reductions. Which of the following might the government choose to increase in order to close an inflationary gap? The