Question
hi could someone help with these questions please 1. (a) What is fiscal policy? (b) Explain how fiscal policy can affect the components of aggregate
hi could someone help with these questions please
1. (a) What is fiscal policy?
(b) Explain how fiscal policy can affect the components of aggregate demand.
2. (a) Under what economic conditions would the government pursue expansionary fiscal policy? Include the aggregate demand, short-run aggregate supply and long-run aggregate supply model in your answers.
(b) Under what economic conditions would the government pursue contractionary fiscal policy? Include the aggregate demand, short-run aggregate supply and long-run aggregate supply model in your answers.
3. If the government does not change fiscal policy during the business cycle, will there be any forces that will help smooth out the economic fluctuations? Explain...
4. Identify each of the following as: (i) part of an expansionary fiscal policy, (ii) part of a contractionary fiscal policy, or (iii) not part of fiscal policy.
a The company income tax rate is increased.
b Defence spending is increased.
c Families are allowed to deduct all their expenses for child care from their taxable income.
d Individual income tax rates are decreased.
e The state of New South Wales builds a new highway in an attempt to expand employment in the state.
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