Answer Bank a decrease in taxes an increase in corporate bonds purchased a decrease in government spending a decrease in transfer payments an increase in the money supply a decrease in the unemployment rate an increase in government spending a decrease in the money supply an increase in tax rates

Answer Bank a decrease in taxes an increase in corporate bonds purchased a decrease in government spending a decrease in transfer payments an increase in the money supply a decrease in the unemployment rate an increase in government spending a decrease in the money supply an increase in tax rates

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles

Section: Chapter Questions

Problem 11E

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Concept explainers

Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.

Question

Classify each statement as an example of expansionary fiscal policy, contractionary fiscal policy, or not an example of fiscal policy. Answer bank In image

Expansionary fiscal policy	Contractionary fiscal policy	Not an example of fiscal policy

Answer Bank
a decrease in taxes
an increase in corporate bonds purchased
a decrease in government spending
a decrease in transfer payments
an increase in the money supply
a decrease in the unemployment rate
an increase in government spending
a decrease in the money supply
an increase in tax rates

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