Dealing with Two Macroeconomic Problems
The a priori arguments in Chapter 2 and the empirical evidence in Chapter 3 imply that there are various combinations of macroeconomic policy instruments that can be used to work towards the achievement of higher real output or employment, so long as there are spare resources in the economy, without increasing prices, and even while reducing the upward pressure on prices. In the present chapter we shall consider a framework of analysis to deal with the choice of appropriate combinations of policy measures to achieve these aims.
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