B. From the list on your right select the letter that contains the word, phrase, name, etc that best matches the word, phrase, name, etc listed on the left Herman Cain, one of the candidates for the 2012 U.S. A Example of discretionary fiscal policy Republican Party presidential nomination, proposed replacing the current tax system with a 9 percent An increase in government spending is completely or partially corporate tax, a 9 percent personal income tax and a 9 offset by reduction in private spending (investment) percent national sales tax, C. Occurs when the government expenditures exceed tax revenue The current tax rate for social security is 6.2% for the D. Recognition lag employer and 6.2% for the employee, or 12.4% total. The taxable-maximum amount for the year is $128,400 which E. An example of a proportionalflat tax system means no social security tax is paid on any additional F income above the $128,400 limit. Example of automatic expansionary fiscal policy Budget deficit G. The Federal government (Congress and the President) In February 2008, immediately after the start of the 2007 H. Increase in government purchases to shift AD to the right and 2009 recession, Congress passed the "Economic Stimulus increase Real GDP Act of 2008* containing a one-time tax rebates for A decrease in government purchases (spending) to shift the households and investment incentives for businesses. Short-run Aggregate Supply curve (SRAS) to the left, Unemployment benefits J. Implementation lag Response to Inflationary gap K The accumulated national (public) debt the U.S. government Response to Recessionary gap owes to different parties L Crowding out An example of a regressive tax system Responsible for Fiscal policy M. The Federal Reserve N. Increase in taxes to reduce AD and Real GDP It takes time to determine the occurrence of recession in the economy 0. A practice by businesses to make the most profit through price gouging (or charging unreasonably high prices) during recession