![]() decreases by more than $30 billion and real GDP decreases. Increases by more than $30 billion and real GDP increases. Increases by $30 billion and real GDP increases.ĭecreases by $30 billion and real GDP decreases. If the government reduces expenditure on goods and services by $30 billion, then aggregate demandĭecreases by more than $30 billion and real GDP decreases. increases by $10 billion multiplied by the government expenditure multiplier. Increases by $10 billion multiplied by the government expenditure multiplier.ĭecreases by $10 billion multiplied by the government expenditure multiplier. Increases by $10 billion multiplied by the tax multiplier. If government expenditure on goods and services increase by $10 billion, then aggregate demand a tax cut, initiated by an act of Congress. ![]() In a recession, needs- tested spending _ and induced taxes _.ĭecreases decrease increases decrease Discretionary fiscal policy is a fiscal policy action, such asĪn interest rate cut, initiated by an act of Congress.Ī decrease in tax receipts, initiated by the state of the economy.Īn increase in payments to the unemployed, initiated by the state of the economy.Ī tax cut, initiated by an act of Congress. spending on programs for people qualified to receive benefits. Taxes paid by those qualified by their income. Spending by the President on the White House. Spending on programs for people qualified to receive benefits. Spending that increases in expansions and decreases in recessions. Spending by Congress on its own perks of office. That rise in recessions and fall in expansions. We are forced to pay for services from the government. That are avoided with the use of legal tax shelters. nduced taxes are defined as taxesĮnacted by Congress that explicitly state the amount to be paid. expenditure for unemployment benefits increasing as economic growth slows. The federal government expanding spending at the Department of Education. ![]() ![]() The Federal Reserve reducing interest rates as economic growth slows.Ĭongress passing a tax rate reduction package.Įxpenditure for unemployment benefits increasing as economic growth slows. An example of automatic fiscal policy isĪ change in taxes that has no multiplier effect. policy that stabilizes without the need for action by the government. Policy that stabilizes without the need for action by the government.Īctions taken by the President without Congressional consent to stabilize the economy.Īctions taken by an act of Congress to stabilize the economy. government has generally had a government budget _ and so the national debt has _.ĭeficit not changed deficit increased Automatic stabilizers are defined asĭiscretionary policy taken to stabilize the economy. (sometimes called income supports) payments that received without the exchange of a good or service, such as welfare payments or unemployment compensation when people lose jobs during recessions, unemployment compensation will mean that consumption will not decrease by as much.Since 2000, the U.S. The amount of income left over after taxes are deducted if you make $ 100 \$100 $ 1 0 0 dollar sign, 100 per week, but $ 10 \$10 $ 1 0 dollar sign, 10 in taxes are deducted, you have $ 90 \$90 $ 9 0 dollar sign, 90 in disposable income that you can actually spend. A fiscal policy action that requires a deliberate act, such as passing a spending bill or a tax planįiscal policy actions that require no action and will occur automatically based on the current phase of the business cycle the most common automatic stabilizers are progressive tax systems and transfer payments.Ī way of taxing that has higher tax rates at higher levels of income for example, Holly makes $ 60, 000 \$60,000 $ 6 0, 0 0 0 dollar sign, 60, comma, 000 per year and pays 10 % 10\% 1 0 % 10, percent in income taxes, but Nasrin makes $ 80, 000 \$80,000 $ 8 0, 0 0 0 dollar sign, 80, comma, 000 per year and pays 15 % 15\% 1 5 % 15, percent in income taxes. ![]()
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