Explain perfectly inelastic id and ss curve

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Reference no: EM13177357

(a) Plot crowding out for the following situations on a graph, and explain why you get the results:

(i) Perfectly inelastic ID curve (vertical) & perfectly elastic SS curve (horizontal).

(ii) Perfectly inelastic SS curve (vertical) & perfectly elastic ID curve (horizontal).
(b) Under which of the above two scenarios should the government use expansionary fiscal policy to boost the economy during a recession?

Reference no: EM13177357

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