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(6,7,8) Solve the 3 problems below. Complete the table below. Choose either an expansionary or a contractionary fiscal policy. [2 pts each] Column A: Objective

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(6,7,8) Solve the 3 problems below. Complete the table below. Choose either an expansionary or a contractionary fiscal policy. [2 pts each] Column A: Objective for Aggregate Demand Write increase or decrease if you wish to increase or decrease aggregate demand. Column B: Action on Taxes Write increase or decrease if you wish to increase or decrease taxes. Column C: Action on Government Spending Write increase or decrease if you wish to increase or decrease government spending. Column D: Effect on Government Budget Write deficit if you wish to increase or the deficit (or reduce the surplus). Write surplus if you wish to decrease the deficit (or increase the surplus). (A) (B) (C) (D) OBJECTIVE ACTION ACTION ON EFFECT FOR ON GOVERNMENT ON AGGREGATE TAXES SPENDING BUDGET DEMAND (6) Business sales and investment are rapidly expanding Many economists forecast strong inflation ahead. (7) Inflation persists while unemployment remains above 6%. (8) A serious flu- like illness is now a pandemic. Forty- two states report many deaths. Many nations also affected

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