Principles of Macroeconomics / Unit 15 MAC 1414 short lesson, about 20 seconds
The Policy Mix, Second Pass
Captions available
The idea
Whether crowding out is severe depends on the central bank. If deficits push demand near potential and the bank contracts, it is severe. If output is far below potential and the bank expands, it is slight.
In practice
Unit fourteen named the four combinations; this is what two of them do.
Where people slip
The bank chooses which margin adjusts, not whether one must.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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