ADMS 1000 Study Guide - Business Cycle, Aggregate Demand, Government Spending

• School: York University
• Department: Administrative Studies
• Course: ADMS 1000
• Professor: Ardeshir Noordeh

Document Summary

Trough: ad is decreasing too slow, governemtn can, decrease taxes. An increase in employment: increase spending. When you calculate gdo, one of the components consists of. Government purchases, increasing government spending will automatically increase the gdp which is ad. Injection: recessionary period: government is attempting to jump start" the economy, expansionary fiscal policy. Peak: ad- is increasing too high, government can, increase taxes. Decrease in employment back to full employment. Inflationary period the government is attempting to cool down" the economy: contractionary fiscal policy. Government legislates taxing and/or spending cuts: example: fiscal cliff/ sequester of 2013 in the us. Thursday, may 15, 2014: changes in spending. Government increasing general spending in all areas of normal budgetary programs (health, welfare, culture, education, etc. ) Can also undertake infrastructure programs (building of schools, roads, hospital) Spending in these areas add to stock of capital goods, and promote outward shift of production possibilities curve in future: changes in taxation.