Contractionary and expansionary fiscal policy
FISCAL POLICY WORKSHEET - OnCourse Systems
Topic: Fiscal Policy. Fiscal Policy: Government spending policy (passed by Congress). This is changes in government spending (government buying goods or paying for services) and taxes. Fiscal policy is used to fight inflation or recession. Government Spending is known as . Discretionary Spending. Two forms of fiscal policy: 1) Expansionary:
[DOCX File]Ch11: Fiscal Policy
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True or False : 1) Expansionary fiscal policy during a recession means cutting taxes, increasing government spending, or taking both actions. 2) An increase in taxes and a decrease in government spending would be characteristic of a contractionary fiscal policy.
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A) fiscal policy is expansionary. B) fiscal policy is contractionary. C) fiscal policy is neutral. D) the tax system is progressive. 16. Crowding-out is the notion that: A) since tax revenues vary directly with GDP, a rise in the level of GDP will increase the budget surplus and limit expansion.
[DOC File]CHAPTER OVERVIEW
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Monetary (and fiscal) policy can be either expansionary or contractionary. The stance of either policy will determine the interest rate, the level of investment, and the level of economic activity. In terms of output, monetary and fiscal policy can work together (both expansionary or both contractionary); in this case Y will either increase or ...
[DOC File]College of Business Administration
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Contractionary (or restrictive) fiscal policy is generally used to (increase, decrease) _____ aggregate demand and _____ the level of prices. Expansionary fiscal policy can be achieved with an decrease in (government spending, taxes) _____, an increase in _____, or a combination of the two. ...
[DOC File]AP Economics Chapter 12 Study Guide – TB
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Fiscal policy actions shift the IS curve and leave the LM curve alone. Expansionary fiscal policy will shift the IS curve to the right, stimulating aggregate demand through increased after tax income and government spending, but increasing interest rates. Contractionary fiscal policy will have exactly the opposite effects. General price level
[DOC File]Fiscal Policy
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expansionary fiscal policy. ... Suppose the economy is currently at e'. If the government implements a contractionary fiscal policy, the economy would move to _____ ...
[DOC File]Money market equilibrium
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If the budget was initially balanced, expansionary fiscal policy creates a budget deficit. 2. Contractionary fiscal policy needed: When demand pull inflation occurs as illustrated by a shift from AD3 to AD4 up the short-run aggregate supply curve in Figure 30.2. Then contractionary policy is the remedy: E. Policy options: G or T? 1.
Expansionary and Contractionary Fiscal Policy | Macroeconomics
Expansionary Policy Impact-increasing debt. Borrowing from the Public- competition for funds will drive up interest rates and counterbalance the effect of increased spending. Money creation-This can alleviate the competition for funds, but can potentially cause increase inflation. Contractionary Policy Impact-increasing surplus
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