Fiscal
How much does AD shift if the Gov. spends 20B and the multiplier is 5
100B
What are the 2 output gap scenarios for the economy
Recessionary (Negative) and Inflationary (Positive)
In a recession you need what Policy
Expansionary Fiscal----Hit the Gas Pedal
Each dollar spent has a greater effect on Aggregate Demand is called
The Multiplier Effect
The government is able to spend money from where? How does the government generate revenue
From Taxes
In times of high Inflation, you need what sort of Policy
Hit the Brakes----Contractionary Fiscal Policy
The taxable multiplier is how much less than the spending multiplier
1
What is an example of a Progressive Tax---
The more you make the more you are taxed
Income Tax---
What are the two Fiscal tools again---
Taxing and Spending your way out of Economic Problems like Unemployment and Inflation
Some examples of automatic stabilizers are
unemployment insurance benefits, welfare benefits, and other forms of income support
What document allows the Gov. to Tax
The Constitution
What range of unemployment is NRU---Full employment
4-6-----%
Fiscal Policy uses what two tools and only these---
Taxing and Spending
Who is the Father of Taxing and Spending/Fiscal Policy
John Keynes
The CPI calculates what
Inflation