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Decreasing taxes can be an appropriate fiscal policy response, particularly during periods of economic downturn or recession, as it can stimulate consumer spending and investment by increasing disposable income. However, the effectiveness of this approach depends on the current economic context, such as the level of public debt and the existing fiscal deficit. If the economy is already strong, tax cuts may lead to budget shortfalls and exacerbate income inequality. Ultimately, the appropriateness of tax cuts as a fiscal policy tool should be evaluated based on specific economic conditions and goals.
What else can I help you with?
When would an increase in government purchases be an appropriate countercyclical fiscal policy?
A decrease in government spending and increase in taxes.
If policy makers are worried about inflation what would be a correct fiscal policy change?
A fiscal policy solution to inflation would be to either increase taxes or decrease government spending.increase the tax rate
Which action is most likely to result in a decrease in money supply?
A contractionary monetary policy or a contractionary fiscal policy.
An example of contractionary fiscal policy would be?
A decrease in government spending and increase in taxes
Does Pakistan follow expansionary fiscal policy?
Fiscal policy is the manipulation of taxation and government spending by the government to affect the economy . Expansionary fiscal policy is when the government what to increase aggregate demand by decrease taxation.Pakistan does not use expantionary fiscal policy because Pakistan have highly economic growth and macroeconomic stability but also some poverty reduction(increase in standard of living)
When would an increase in government purchases be an appropriate countercyclical fiscal policy?
A decrease in government spending and increase in taxes.
What is a fiscal policy designed to do?
Increase or decrease the money supply
In a recession what does the fiscal policy call the government to do?
decrease income tax
If policy makers are worried about inflation what would be a correct fiscal policy change?
A fiscal policy solution to inflation would be to either increase taxes or decrease government spending.increase the tax rate
Which action is most likely to result in a decrease in money supply?
A contractionary monetary policy or a contractionary fiscal policy.
An example of contractionary fiscal policy would be?
A decrease in government spending and increase in taxes
Does Pakistan follow expansionary fiscal policy?
Fiscal policy is the manipulation of taxation and government spending by the government to affect the economy . Expansionary fiscal policy is when the government what to increase aggregate demand by decrease taxation.Pakistan does not use expantionary fiscal policy because Pakistan have highly economic growth and macroeconomic stability but also some poverty reduction(increase in standard of living)
The response of businesses and individuals to fiscal policy changes is related to which of these?
the amount of funds government is spending
Who came up with fiscal policy?
The term "fiscal Policy" is often associated with John Maynard Keynes. During the Great depression John Maynard Keynes believed that the recessionary gap was caused by a decrease in aggragate demand. This led him to develop theories which involved closing the gap by expansionary fiscal policy as it is called today. This could be achieved by increasing government spending to account for a decrease in Consumption by the private sector.
Fiscal policy and its objectives?
fiscal policy OBJ. in relation to taxation policy and expenditure policy
What is fiscal policy centered on?
Fiscal policy is a policy centered on ideas and research.
How could monetary policy could conflict with fiscal policy in trying to resolve stagflation?
They could conflict because of differing ideas on what will resolve stagflation. The fiscal policy may be spending money to meet the programs for the government. The monetary policy may be trying to decrease business involved in the fiscal policy. Actions meant to lower inflation may worsen the stagflation. It is sometimes difficult to reverse stagflation once it has begun.
