Homework Answers
Microeconomics deals with study of individual and household and firms behaviour in allocation of resources .
If individuals are left with higher disposable incomes through expansionary fiscal policy this will increase aggregate demand and hence drive real GDP ahead.
Also due to expansionary fiscal policy corporate taxes are cut which will increase firms net profits and hence real GDP shall also increase due to higher disposable incomes and consumption by people.
Thus microeconomic drivers help change macroeconomic fundamentals like GDP, CPi Inflation and Tax to GDP ratios.
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