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Which of the following fiscal policy measures would be expected to have an expansionary and which a contractionary impact upon the level of economic activity?
Which of the following fiscal policy measures would be expected to have an expansionary and which a contractionary impact upon the level of economic activity?
- (a) A cut in direct taxation...................................................................expansionary / contractionary
- (b) A rise in personal allowances.........................................................expansionary / contractionary
- (c) An increase in public-sector net borrowing......................................expansionary / contractionary
- (d) A reduction in social security benefits.............................................expansionary / contractionary
- (e) A move from a budget deficit to a budget surplus............................expansionary / contractionary
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