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criteria
expansionary fiscal policy
concept: is the policy of strengthening government spending (G> T) spending through enhanced government spending or reduce tax revenues or both
engines: - increased government expenditure
+ expenditure increase transfer (read no need for goods and services in return for pension benefits, insurance expenses)
- tax cuts
- has increased spending by the government has reduced taxes
objectives: reducing unemployment and expand aggregate demand
application instances when economic output at a low level compared to the potential output (Y <Y *)
to tighten fiscal policy
concept: is the policy in which spending less government through increased tax revenues or reduce spending or a combination of both
engines: - reduction of government spending
+ reduce transfer
- tax increases
mortar spending has reduced government tax
- reduce transfer
targets: reducing inflation
applicable cases: when the economy output exceeds potential output
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