. Question 2 The fiscal space in Denmark has turned out to be greater than expected....

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Economics

. Question 2 The fiscal space in Denmark has turned out to be greater than expected. On that basis, the government has announced fiscal policy easing, including additional funding for the healthcare system and defense. The increased fiscal space has also sparked discussions about the possibility of tax cuts. a) What are the short-term economic effects for Denmark of an expansionary fiscal policy? Analyze, illustrate, and explain. (Analyze a change in both Y and Y in two open economies)

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