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1. Describe fiscal policy in the Czech republic in detail 2. Describe multiplier in open economy...

1. Describe fiscal policy in the Czech republic in detail

2. Describe multiplier in open economy in the Czech republic

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Answer #1

Czech Republic has adopted an expansionary fiscal policy by reducing taxes and inducing higher spending and automatic stabilizers as well as implementing structural reforms for each sector to revive its economy and give stability to inflation.

Multiplier effect works in open economy as higher spending and tax cuts leads to higher disposable incomes. Moroever corporations have higher cash flow to spend and hiring rises which all collectively spurs consumption and thus aggregate demand curves shifts rightwards causing rral GDP to rise and booster to economic growth.

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