Navigation
AD/AS Ninja

AD/AS Ninja!


Brunei AD/AS Model

inflationary gap
1) What type of problem is Brunei facing?

2) What two types of fiscal policy could help remedy this problem?

3) What type of open market operartion could the central bank pursue to help remedy this problem?

4) If the government and central bank refuse to intervene, what will happen to this model in the long run? Explain.

5) Suppose fiscal authorities decide to change government spending by $4 million. If the MPC is 0.8, what's the total potential impact that this action could have?

6) Suppose fiscal authorities decide to change taxes by $6 million. If the MPC is 0.8, what's the total potential impact that this action could have?


Click for answer

Try another!

Login
Username

Password



Not a member yet?
Click here to register.

Forgotten your password?
Request a new one here.
Review Book

Five Steps to a 5