01 May Question: QUESTION 3 3.1. Use a diagram to explain how a decrease in government spending will affect the le…
QUESTION 3
3.1. Use a diagram to explain how a decrease in government spending will affect the level of income in the Keynesian model. (Explanation)
3.2. Use a diagram to explain how an increase in taxes will affect the level of income in the Keynesian model. (Explanation)
3.3. South Africa experienced a severe decline in real gross domestic production during the last quarter of 2008 and the two quarters of the first half of 2009. Use an AD-AS model to illustrate and explain the policies that could be used to resolve this situation. (Explanation)
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