Questions on aggregate demand and disposable income

Reference no: EM1312814

The US government is increasing its spending and cutting taxes. The Federal Reserve has reduced interest rates. The Obama administration hopes that the economy will begin to grow again without inflation.

Illustrate the position of the US economy over the next couple of years using aggregate demand and supply curves if these expectations are to be realized.

(Hint: Look at, among other things, budget deficits, bank credit to the private sector, prices paid for imports, and the exchange rate and food production and food availability)

Reference no: EM1312814

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