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Home/Business & Economics/Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples’ investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What would be the likely impact on the government budget and national debt of the use of the fiscal policy tools?

Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples’ investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What would be the likely impact on the government budget and national debt of the use of the fiscal policy tools?

If the government engages in tax increase tools to address the nation’s economic issues, the government budget will have lesser deficits as the collected taxes will be used to finance the budget. Nevertheless, the national debt will drop substantially as the government will not need to borrow to finance the budget. On the other side, if the government considers engaging expenditure reduction tools, the national budget will contract and be more comfortable to settle. Consequently, the lower national debts will be realized as the available resources will be sufficient to fund the account.

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Academic.Tips. (2022) 'Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What would be the likely impact on the government budget and national debt of the use of the fiscal policy tools'. 3 November.

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Academic.Tips. (2022, November 3). Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What would be the likely impact on the government budget and national debt of the use of the fiscal policy tools? https://academic.tips/question/suppose-the-economy-of-a-hypothetical-country-has-reached-its-long-run-macroeconomic-equilibrium-when-each-of-the-following-aggregate-demand-shocks-occurs-the-economy-of-a-hypothetical-country-has-b-4/

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Academic.Tips. 2022. "Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What would be the likely impact on the government budget and national debt of the use of the fiscal policy tools?" November 3, 2022. https://academic.tips/question/suppose-the-economy-of-a-hypothetical-country-has-reached-its-long-run-macroeconomic-equilibrium-when-each-of-the-following-aggregate-demand-shocks-occurs-the-economy-of-a-hypothetical-country-has-b-4/.

1. Academic.Tips. "Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What would be the likely impact on the government budget and national debt of the use of the fiscal policy tools?" November 3, 2022. https://academic.tips/question/suppose-the-economy-of-a-hypothetical-country-has-reached-its-long-run-macroeconomic-equilibrium-when-each-of-the-following-aggregate-demand-shocks-occurs-the-economy-of-a-hypothetical-country-has-b-4/.


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Academic.Tips. "Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What would be the likely impact on the government budget and national debt of the use of the fiscal policy tools?" November 3, 2022. https://academic.tips/question/suppose-the-economy-of-a-hypothetical-country-has-reached-its-long-run-macroeconomic-equilibrium-when-each-of-the-following-aggregate-demand-shocks-occurs-the-economy-of-a-hypothetical-country-has-b-4/.

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"Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What would be the likely impact on the government budget and national debt of the use of the fiscal policy tools?" Academic.Tips, 3 Nov. 2022, academic.tips/question/suppose-the-economy-of-a-hypothetical-country-has-reached-its-long-run-macroeconomic-equilibrium-when-each-of-the-following-aggregate-demand-shocks-occurs-the-economy-of-a-hypothetical-country-has-b-4/.

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Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. How will the use of the fiscal policy tools stabilize the economy?
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