For each of the following situations,choose a fiscal policy and explain how it could be used to correct the economic problem.
a. Real GDP is below potential GDP following a financial market crisis.
b. A positive demand shock increases aggregate expenditure beyond the full employment level and leads to fears of rising inflation.
c. The economy is in a recession due to rising defaults on mortgages following the bursting of a housing bubble.

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The Answer of For each of the following situations,choose a fiscal policy and explain how it could be used to correct the economic problem.
a. Real GDP is below potential GDP following a financial market crisis.
b. A positive demand shock increases aggregate expenditure beyond the full employment level and leads to fears of rising inflation.
c. The economy is in a recession due to rising defaults on mortgages following the bursting of a housing bubble.

For Each of the Following Situations,choose a Fiscal Policy and Explain