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Economists use the term fiscal policy to refer to changes in taxing and spending policies.

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Alice Sejake
Alice SejakeLv10
14 Oct 2020

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Related questions

Fill in the blank:

The use of taxing and spending powers to shape the economy is part of ________ policy.

In 2016, economists forecast the U.S. MPS will be 0.15 and the MPM will be 0.10. Estimate the maximum overall total effect on national income of the following two changes in fiscal policy:

a) If a decrease in government spending of $100 billion and a decrease in taxes of $50 billion.

b) If fiscal policy is unchanged (ignore part (a) above) but GPDI from business increases as below, what will be the maximum impact on national income?

An increase in planned business investment spending of $60 billion without any change in fiscal policy.

c) What are some reasons why the maximum multiplier effect might not happen in the U.S.?

Discretionary fiscal policy is the use of:

a. interest rate changes to affect aggregate demand.

b. interest rate changes to affect aggregate supply.

c. government spending or tax policy to manage aggregate demand.

d. government spending or tax policy to manage aggregate supply.

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