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When the government lowers the income tax to stimulate the economy it is an example of what kind of policy?
Wiki User
∙ 14y ago
monetary policy
Wiki User
∙ 14y ago
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Does an increase in government spending increase income?
An increase in government spending helps to stimulate an economy. Because the government is now paying other people to do work, those people are now receiving an income. They can then reinvest in the economy, leading to an overall growth in the nation's economy.
What is underground economy?
products and income that are not reported as income to the government
What methods could the federal government use to stimulate the economy during a time when people were opposed to deficit spending?
The only way the federal government can lower taxes without contributing to a greater deficit is by cutting spending as well. This may either cause an increase in federal revenues through increased taxable income in a growing economy or have little to no effect in stimulating economic growth. The other way to stimulate the economy without increasing the deficit is eliminating regulations that create hurdles to businesses starting up and growing.
What are the determinants of induced consumption in Keynesian model of a closed economy with a government sector?
Income and taxes
Define and give an example of the income effect?
The income effect is the change in an individuals or economy's income and how that change will impact the quantity demanded. For example, after a raise, John Doe would desire more products, because he has greater disposable income.
Does an increase in government spending increase income?
An increase in government spending helps to stimulate an economy. Because the government is now paying other people to do work, those people are now receiving an income. They can then reinvest in the economy, leading to an overall growth in the nation's economy.
Why were income taxes cut in 1964?
to stimulate the economy
What is underground economy?
products and income that are not reported as income to the government
What methods could the federal government use to stimulate the economy during a time when people were opposed to deficit spending?
The only way the federal government can lower taxes without contributing to a greater deficit is by cutting spending as well. This may either cause an increase in federal revenues through increased taxable income in a growing economy or have little to no effect in stimulating economic growth. The other way to stimulate the economy without increasing the deficit is eliminating regulations that create hurdles to businesses starting up and growing.
What are the two ways the federal government could respond to an increase in the economy?
raise income taxes and decrease government spending
What are the determinants of induced consumption in Keynesian model of a closed economy with a government sector?
Income and taxes
Define and give an example of the income effect?
The income effect is the change in an individuals or economy's income and how that change will impact the quantity demanded. For example, after a raise, John Doe would desire more products, because he has greater disposable income.
What things make up a country's economy?
Lot's of things, but mostly the government, businesses, individuals income and where that spend their disposable income and groups and organizations.
Explain how a government is involved in a centrally planned economy?
it controls all major sectors of the economy and formulates all decisions about their use and about the distribution of income
What is a Curtailment of income?
A curtailment of income is when your income has been cut short for any reason. (Example: Due to the economy, instead of being laid off we all just took a paycut. We have a curtailment of income)
How does Japans government influence its economy?
a social compact that included such features as lifetime employment among the big firms.
Which of the following is not a critical function of the government in facilitating the operation of a market economy?
ensuring an equal distribution of income to all citizens
