Despite this, the Government has employed many discretionary changes in fiscal policy, to stimulate aggregate demand and supply in the economy, and thus, increase economic growth. ... Another method to stimulate economic growth is to increase aggregate demand, which is accomplished through a series of tax cuts highlighted in the Ten Year Tax Plan. ... These effects of NAIRU are demonstrated in the Phillips curve below. ... A decrease in NAIRU to B, also shifts the short-run Phillips curve. ... As well as social and political benefits, redistributing income can stimulate aggregate demand, as ...

• Word Count: 1386
• Approx Pages: 6
• Grade Level: Undergraduate

Economic growth, in the short run, is the rise in real GDP due to the rise in aggregate demand, and in the long run, it's an increase in productive capacity-the maximum output that the economy can produce. ... For example, the invention of the computer has significantly increased worker productivity. ... Production possibilities Curves demonstrate how economic growth can reduce scarcity. ... Since this increase maximum output that we are able to produce it shifts the production possibilities curve outward. ... This causes the demand to increase on certain products, which leads to the...

• Word Count: 1462
• Approx Pages: 6
• Grade Level: Undergraduate