Answer :
Supply-side fiscal policies focus on shifting the long-run aggregate supply curve to the right, resulting in a stabilize price level and reduce unemployment.
- Through adjustments to government expenditure and taxation, fiscal policy affects aggregate demand.
- These elements have an impact on employment and household income, which in turn affect consumer spending and investment.
- The amount of money in an economy changes as a result of monetary policy, which also affects interest rates and inflation.
Concentrate on moving LRAS to the right to
- Encourage growth
- Lower unemployment
- Stabilize the market
- Has a slower economic impact than initiatives that raise AD
What shifts long run aggregate supply?
- Changes in Long-Run Aggregate Supply.
- The position of the long-run aggregate supply curve is determined by the aggregate production function and the demand and supply curves for labor.
- A change in any of these will shift the long-run aggregate supply curve.
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