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Why can higher government spending increase total demand directly?
A
Fiscal policy works on total spending directly.
B
It adds government spending to the economy without waiting for others to act.
C
- A slack economy gains output and jobs.
- An economy near capacity gains mainly inflation.
D
Recovery may already be under way, so extra demand adds mainly to inflation.
Card 1 of 20
3.5.6 Costs and benefits of fiscal policy Flashcards
20 flashcards on OCR GCSE Economics 3.5.6 Costs and benefits of fiscal policy: the key terms, formulae and calculations you need to recall for Component 01 and Component 02.