anonymous
  • anonymous
I know this is math, but, can anyone help me with economics please?
Mathematics
  • Stacey Warren - Expert brainly.com
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katieb
  • katieb
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Azionne
  • Azionne
sure
anonymous
  • anonymous
The United States is suffering from a high rate of unemployment. Identify two fiscal policy actions that Congress might initiate to solve the problem. Using a correctly labeled AD/AS graph, show and explain how the policies you identified in (a) will affect each of the following in the short-run. aggregate demand output and employment price level Explain how the policies you identified in part (a) will impact real interest rates in the short-run. If the interest rate effect you identified in part (b) continues in the long run, explain how economic growth will be impacted.
anonymous
  • anonymous
I have got the fiscal policies

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Azionne
  • Azionne
ummmm so what exactly are u looking for :)
anonymous
  • anonymous
The graph :)
anonymous
  • anonymous
I'm pretty sure I answered this exact same question. The government is going to want to use expansionary policy, so you would increase government spending or decrease personal income taxes. This increases aggregate demand, or shifts it right. Draw this situation on an AD/AS graph and see what it does to price and output.
anonymous
  • anonymous
ok thank you :)
anonymous
  • anonymous
And what about this: Explain how the policies you identified in part (a) will impact real interest rates in the short-run. If the interest rate effect you identified in part (b) continues in the long run, explain how economic growth will be impacted.
anonymous
  • anonymous
Hold on. I completed this assignment but have to find it on my computer.
anonymous
  • anonymous
When the government uses expansionary fiscal policy, the demand for loanable funds increases. When demand shifts right, what happens to interest rates? Do they increase or decrease?
anonymous
  • anonymous
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anonymous
  • anonymous
they increase
anonymous
  • anonymous
so is that the kind of graph I need?
anonymous
  • anonymous
@verlieren ?
anonymous
  • anonymous
Sorry, I was feeding my cat lol. Yes, you'll need an AD/AS graph for the first part and then a loanable funds graph for the second part.
anonymous
  • anonymous
ok, and what is the better way to explain that in words? Explain how the policies you identified in part (a) will impact real interest rates in the short-run. If the interest rate effect you identified in part (b) continues in the long run, explain how economic growth will be impacted.
anonymous
  • anonymous
Does the price level decrease when employment increases?
anonymous
  • anonymous
When AD increases and therefore PL, that means RGDP is increasing. As RGDP increases, employment increases. i.e. as employment increases, PL increases. Make sure not to copy my answer word for word as you'd get in trouble for plagiarism, but basically expansionary fiscal policy causes the demand for loanable funds to increase, increasing real interest rates. Higher interest rates stimulate financial investment, so the economy will grow...at least that's what I think. That was the one part I was unsure of. I'm still waiting for my assignment to get graded.
anonymous
  • anonymous
Ok. thanks a lot that was very helpful! :)

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