Why Would The Government Use Contractionary Policy? The government can use contractionary fiscal policy to slow economic activity by decreasing government spending, increasing tax revenue, or a combination of the two. Decreasing government spending tends to slow economic activity as the government purchases fewer goods and services from the private sector. Why would the government
How Large A Tax Cut Would Be Needed To Achieve The Same Increase In Aggregate Demand? How large a tax cut would be needed to achieve the same increase in aggregate demand? $12.50 billion. How can a tax cut eliminate a recessionary gap? Fiscal policy means using either taxes or government spending to stabilize the
When Inflation Begins To Climb To Unacceptable Levels In The Economy The Government Should Chegg? Question: Question 7 1 pts When inflation begins to climb to unacceptable levels in the economy, the government should use contractionary fiscal policy to shift aggregate demand to the left. How does fiscal policy shift the aggregate demand curve? Expansionary
Which Of The Following Would Help A Government Reduce An Inflationary Gap? Policies that can reduce an inflationary gap include reductions in government spending, tax increases, bond and securities issues, interest rate increases, and transfer payment reductions. Which of the following might the government choose to increase in order to close an inflationary gap? The