The CARES Act was the largest in both nominal and real measures of fiscal relief/stimulus passed in U.S. history. The package will cost $2 trillion as it stabilizes consumer spending during a period of unprecedented unemployment. Simultaneously, the global pandemic caused a supply-side shock as supply chains experienced delays as households stock up on basic necessities. In terms of aggregate demand and aggregate supply, explain if the CARES Act would cause a significant rise in prices?

The CARES Act was the largest in both nominal and real measures of fiscal relief/stimulus passed in U.S. history. The package will cost $2 trillion as it stabilizes consumer spending during a period of unprecedented unemployment. Simultaneously, the global pandemic caused a supply-side shock as supply chains experienced delays as households stock up on basic necessities. In terms of aggregate demand and aggregate supply, explain if the CARES Act would cause a significant rise in prices?

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 9SQP

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