• March 16th, 2016

Macroenomics

Paper, Order, or Assignment Requirements

The UK government has over several years been implementing a policy of austerity. Use the loanable funds model for a closed economy to analyse the long-run consequences of a cut in public spending for private savings, aggregate savings, and the interest rate. Briefly discuss how such public spending cuts are likely to affect aggregate demand in the short run.

 

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