1
Q
what is fiscal policy?
A
the use of government spending and taxes to influence the nation’s spending employment, and price level.
2
Q
what is discretionary fiscal policy?
A
the deliberate use of changes in government spending or taxes to alter aggregate demand and stabilize the economy
3
Q
what are the discretionary fiscal policies?
expansionary fiscal policy and contractionary policies
A
expansionary: increase govt spending, decrease taxes, increase government spending and taxes equally
contractionary: decrease govt spending, increase taxes, decrease govt spending and taxes equally
Macroeconomics
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