Question
1/ What is the main difference between discretionary spending and mandatory spending? 2/ Explain why increasing government purchases of goods and services is expansionary fiscal
1/ What is the main difference between discretionary spending and mandatory spending?
2/ Explain why increasing government purchases of goods and services is expansionary fiscal policy. Would increasing taxes or reducing transfer payments be contractionary or expansionary? Why?
3/ Explain why changes in tax rates affect both aggregate demand and aggregate supply.
4/ What is one benefit to businesses when the government budget is in surplus?
5/ How might interest paid on the national debt lead to greater income inequality?
6/ What factors determine whether the national debt is a cause for immediate concern?
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