4. The recent tax cuts are the type of policy that typically used to stimulate an...

4. The recent tax cuts are the type of policy that typically used to stimulate an economy during a recession, but they have been implemented during an expansion. Make two arguments (using narrative and graphs, both), one in support of the policy and one against it. Use economic reasoning in your answers.

Solutions

Expert Solution

I understand the concern but at the point when an economy is in a recession, expansionary fiscal policy is all together. Typically this type of fiscal policy brings about expanded government spending as well as lower charges. A recession results in a recessionary gap implying that aggregate demand (ie, GDP) is at a level lower than it would be in a full work circumstance. With a specific end goal to close this gap, a legislature will regularly build their spending which will straightforwardly expand the aggregate demand curve (since government spending makes interest for products and ventures). In the meantime, the legislature may cut duties, which will in a roundabout way influence the demand curve bend by taking into account customers to have more cash available to them to devour and contribute. The activities of this expansionary monetary arrangement would bring about a move of the aggregate demand curve bend to one side, which would come about shutting the recessionary gap and helping an economy develop.

Therefore, Tax rate cuts at time of recession in order to close the recessionary gap and that is only called an expansion.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

4. The recent tax cuts are the type of policy that typically used to stimulate an...

The recent tax cuts are the type of policy that typically used to stimulate an economy...

The recent tax cuts are the type of policy that typically used to stimulate an economy during a recession, but they have been implemented during an expansion. Make two arguments (using narrative and graphs, both), one in support of the policy and one against it. Use economic reasoning in your answers.

The recent tax cuts are the type of policy that typically used to stimulate an economy...

The recent tax cuts are the type of policy that typically used to stimulate an economy during a recession, but they have a been implemented during an expansion. make two arguments(using narrative and graphs, both) one is support of the policy and one against it. use economic reasoning in your answers.

A) Outline a positive set of outcomes that could follow the recent tax cuts in the...

A) Outline a positive set of outcomes that could follow the recent tax cuts in the United States. B) Outline a negative set of outcomes that could follow the recent tax cuts in the United States. ( Based on College economics )

1 Current government policy In this year, the US government decide to cut tax to stimulate...

1 Current government policy In this year, the US government decide to cut tax to stimulate economic growth. Meantime, the US government raise the tariff against a list of imported goods from Asian countries. Use the open economy IS? ?LM? model to graphically explain how a combination of the fiscal and trade policy will affect the real exchange rate and the real output in equilibrium.

Both Keynes with his view of Fiscal Policy and Supply-Siders are in favor of tax cuts,...

Both Keynes with his view of Fiscal Policy and Supply-Siders are in favor of tax cuts, but for different reasons. What is the reason that each would want a tax cut? Which makes the most sense to you? Would you consider the latest Tax Cut that Congress passed to be a Keynesian or Supply-Side Policy? In other words, will it stimulate spending (Keynesian Theory) or worker productivity and output (Supply-Side). If you were to choose one of the policy options to...

1. A tax cut to the tax rates may not stimulate the economy if: a)It is...

1. A tax cut to the tax rates may not stimulate the economy if: a)It is permanent and increases permanent disposable income b) decisions for consumption are based only on current income instead of permanent income c) it is distributed evenly in the population of the economy d) it is temporary and thus doesn't change the permanent disposable income e) It is too big 2. An economy that is headed into recession decides to start an expansionary fiscal policy. 6...

Does the 2017 tax cuts jobs act policy add to the long-term national debt within the...

Does the 2017 tax cuts jobs act policy add to the long-term national debt within the U.S.?

Which type of health insurance policy typically consists of coverage of 80%, or similar, of expenses...

Which type of health insurance policy typically consists of coverage of 80%, or similar, of expenses after meeting an annual deductible? a.a Preferred Provider Organization (PPO) plan b.a Health Maintenance Organization (HMO) plan c.an indemnity plan d.a whole life plan e.a floater plan A perspective of investment tends to work under a _________ time horizon, with relatively _______ trades. a.long-term; many b.long-term; few c.short-term; many d.short-term; few e.immediate-term; many As opposed to broker markets, dealers typically _____________ within ____________. a.arrange...

4. A progressive tax policy cannot be achieved with the enactment of tax credits that are...

4. A progressive tax policy cannot be achieved with the enactment of tax credits that are targeted to individuals based on their income level. True/False _____________Correction to make true____________________________________________________________________________________ 5. Statutory and Economic Incidence when analyzing tax policy options are always the same thing. True/False ________________Correction to make true____________________________________________________________________________________ 6. Moving to a jurisdiction which has a lower state and local tax burden reflects the general rule for tax policy analysis. True/False ________________Correction to make true____________________________________________________________________________________

Subjects