Economics1) Distinguish between discretionary andnondiscretionary fiscal policy.2) Differentiate between expansionary andcontractionary fiscal policy.3) Plot the following markets on a graph:AD/AS graph: using 19.1 trillion for RGDP and 1.9%for inflation as point A (equilibrium).How will our AD/AS graph look like when U.S.government buys more military vessels (Shift theappropriate AD/AS curve on the graph)?4) Plot the following markets on a graph:AD/AS graph: using 19.1 trillion for RGDP and 1.9%for inflation as point A (equilibrium).How will our AD/AS graph look like whenCongress implements an income tax cut (Shift theappropriate AD/AS curve on the graph)?

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1) Distinguish between discretionary and nondiscretionary fiscal policy.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter24: Fiscal Policy

Section: Chapter Questions

Problem 11P

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Question

Economics
1) Distinguish between discretionary and
nondiscretionary fiscal policy.
2) Differentiate between expansionary and
contractionary fiscal policy.
3) Plot the following markets on a graph:
AD/AS graph: using 19.1 trillion for RGDP and 1.9%
for inflation as point A (equilibrium).
How will our AD/AS graph look like when U.S.
government buys more military vessels (Shift the
appropriate AD/AS curve on the graph)?
4) Plot the following markets on a graph:
AD/AS graph: using 19.1 trillion for RGDP and 1.9%
for inflation as point A (equilibrium).
How will our AD/AS graph look like when
Congress implements an income tax cut (Shift the
appropriate AD/AS curve on the graph)?

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