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From course:

Economics A Level (DONEEEEEEE)

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Question:

When would the 2 Types of Fiscal Policy be Deployed? -Why?

Author: eric_galvao



Answer:

-Loose Fiscal Policy will be deployed when a Recession is in Place, or as Negative Output Gap is Present. Economic Growth will Increase and Unemployment will Sink. But Inflation and the Current Account will Worsen -Tight Fiscal Policy will be used when a Boom or Positive Output Gap is Present. Economic Growth and Employment will tank but Inflation and the Current account will be Better off


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