If the federal government decides to raise taxes and reduce government spending, they are most likely trying to achieve which of the folloiwng?
an increase in aggregate demand and a decrease in real GDP
a dcrease in aggregate demand and an increase in real GDP
an increase in aggregate demand and real GDP.
a decrease in aggregate demand and real GDP
Examine the image above. Assume that the federal government's fiscal policies led to the results shown in the image above wher AD0 shifts right to AD1.
Select the TWO actions that could have caused the impact above.
Reducing government expenditures
Reducing income taxes
Raising government expenditures
Raising income taxes
The primary goal of contractionary fiscal policy is to
reduce unemployment
reduce price levels
increase aggregate supply
increase real GDP
Tax revenue is $2.3 trillion in a country for 2018-2019.
Government expenditures in the country are $2.7 trillion.
Which of the following statements is true?
The country is running contractionary fiscal policy.
The country has a balanced budget.
The country has a budget deficit and will need to borrow $.4 trillion.
The country has a budget surplus and will have $.4 trillion left in the treasury.
Expansionary fiscal policy is created by reducing taxes or increasing government spending.
Which of the following is a downside of expansionary fiscal policy?
