A big increase in government spending is an example of a positive demand shock.
A demand shock is a sudden event that increases or decreases demand for goods or services temporarily. A positive demand shock increases aggregate demand and a negative demand shock decreases aggregate demand. Therefore there will be an initial inflation with the shock but since demand shocks are temporary and the central bank commits to an inflation rate target, then over time inflation will fall back down to the inflation target.
Expansionary fiscal policy is an increase in government spending or a decrease in taxation, while contractionary fiscal policy is a decrease in government spending or an increase in taxes. Expansionary fiscal policy can be used by governments to stimulate the economy during a recession.
Learn about positive demand shock:
brainly.com/question/14528859
#SPJ4
Answer: A (Direct action)
Explanation:
The above statement is the definition of direct action strike according to US department of defense.
Answer:
Which answer best explains James Otis' views of the Revolutionary Period? ... Otis felt that representation without taxation was tyranny
Explanation:
Answer:
They wanted to be independent
Explanation:
The American colonists fought the British for one main reason. They fought because they wanted to be independent. ... One reason the American colonists wanted to be independent was British taxation. Many Americans did not think that the British government had the right to tax them.
