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Fiscal policy includes two general tools that affect total

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Fiscal policy includes two general tools that affect total spending, and, furthermore, eliminate output gaps: changes in government purchases, and changes in taxes or transfer payments. While the basic Keynesian model may cause you to think that the precise use of fiscal policy can eliminate output gaps, the reality is not this simple.

Discuss three reasons why using fiscal policy to stabilize the economy is more complicated than what is suggested by the basic Keynesian model.

The length of each response should be approximately 250 words
Submitted: 5 years ago.
Category: Homework
Expert:  Joanne replied 5 years ago.

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