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Summary. With Our Newly Elected President In The White

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Summary
With our newly elected president in the White House and trying to make big changes and show America he meant what he was campaigning Trump seems to be make huge budget cuts to many areas of our country. While on the other hand he is giving additional funding to some areas too. Of the many areas that the budget is being cut education, the Environmental Protection Agency, the State department, health and human services, transportation, and the list goes on and on. Of those the two major ones that stand out are the Environmental Protection Agency, which is being slashed by almost thirty-two percent and the State department being cut by nearly twenty-nine percent (Kopan). “Virtually every agency will see some sort of cut, with only …show more content…

With this increase in government spending on defense gear and construction materials it will cause a multiplier effect because in order for those products to be made they will need other companies to do parts of the process. There would be an increase in those goods being bought so you would need more of the supplies to make them and more employees, which is how the multiplier effect works. The increase in government spending for these two areas (fiscal policy) would make the aggregate demand curve shift to the right (Diagram 1). This increase in government spending also causes price level and the gross domestic product (GDP) to increase and an inflationary gap will be created due to this increase (Diagram 2) as long as we’re at equilibrium with the long run aggregate supply (LRAS), short run aggregate supply (SRAS), and aggregate demand (AD). However, with the cuts in so many other areas this will decrease government spending dealing with each of them. Completely counteracting every bit of growth from increasing spending in defense and immigration enforcement. Since, President Trump is cutting education, the Environmental Protection Agency, transportation, and more every thing dealing with those areas will also cut back in spending to stay on budget. These decreases in government spending causes a multiplier effect as well, but not how we want it. It’s taking away from

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