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A Primer on Macroeconomics by Thomas Beveridge

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Chapter 6

The Government Sector

Fiscal Policy and Short-Run ­Stabilization

By the end of this chapter you will be able to:

1. Describe the economic functions of government in a market ­economy.

2. Define the federal deficit (surplus) and explain how its relationship to the federal debt.

3. Identify the tools of fiscal policy.

4. Describe how the inclusion of the government sector affects the ADAS model.

5. Explain how autonomous changes in government spending and net taxes affect output, unemployment, and inflation.

6. Assess the effectiveness of fiscal policy actions and some of the problems in the implementation of fiscal policy.

7. Explain how the incorporation of tax rates will influence the expenditure multiplier.

8. Explain the effects ...

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