Monetary policy or fiscal policy

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Reference no: EM139339

Q. Now you want to "improve" the aggregate production function to increase the provide capacity of the economy. That is, you desire to move the vertical LRAS to the right on the AS/AD diagram.

(1) List four initiatives that you would focus upon to get the job done.

Let's say your economy is at a less-than-full-employment equilibrium with an upward sloping short run aggregate providing curve (SRAS). You suddenly move to the right. You want to get back to full employment as quickly as possible.

(2) Defend your use of either monetary policy or fiscal policy to do this.

(3) Illustrate what might happen to price expectations with the policy case you defend and explain how may these expectations affect the outcome of your policy initiative?

Reference no: EM139339

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