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The document discusses the impact of fiscal and monetary policy on aggregate demand (AD) and the mechanisms through which they operate, including the interest-rate effect and the multiplier effect. It outlines how the central bank can shift the AD curve through monetary policy and how fiscal policy can influence AD via government spending and taxation. Additionally, it addresses the arguments for and against using policy to stabilize the economy, highlighting the complexities of the multiplier and crowding-

Author

omar.kaykhusraw

Language

EN