Answered: 2.1. In the given figure, what does the…

2.1. In the given figure, what does the gap 'KT' represent? State and discuss any two fiscal measures to correct the situation. [AE]

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter24: Fiscal Policy

Section: Chapter Questions

Problem 3P

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Question

Q.1. In the given figure, what does the gap 'KT'
represent? State and discuss any two fiscal
measures to correct the situation.
[AE]
Y-axis
Aggregate
Demand (AD)
45°
T
YF
AD (C+I+DI)
AD (C+I)
→ X-axis
Income

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