Question

In: Economics

Find an example of fiscal policy in your life. 1) Describe the policy tool. 2) Explain...

Find an example of fiscal policy in your life.

1) Describe the policy tool.

2) Explain how it impacts your life using a current policy that is in effect.

3) Explain how it impacts the macro-economy. Use as many economic principles and the AD/AS or the expenditure function model to illustrate the impacts.

Solutions

Expert Solution

a) Taxes are the policy tool that affect us the most.

b) Taxes are deducted or people in the economy have to pay taxes that reduce the gross income of the cosnumers and reduce the aggregate demand in the market.

c) Taxes in the market reduce the disposable income in the market, if taxes are increased then the aggregate demand curve in the market will shift to the left and the new equilibrium will be at a lower price and lower output, if the taxes are decreased then AD curve will shift to the right and new equilibrium will be at a higher price and higher level of output.

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

define expansionary fiscal policy and explain: (1) when the government uses expansionary fiscal policy, (2) its...
define expansionary fiscal policy and explain: (1) when the government uses expansionary fiscal policy, (2) its possible negative impacts (3) why it doesn't always work as intended, and (4) why it sometimes can be destabilizing for the economy.
please provide one real-life example of fiscal policy is from the fiscal year 2019? write a...
please provide one real-life example of fiscal policy is from the fiscal year 2019? write a paragprah. Thank you
1.​Describe the difference between expansionary and contractionary Fiscal Policy. 2.​Describe 3 of the functions of the...
1.​Describe the difference between expansionary and contractionary Fiscal Policy. 2.​Describe 3 of the functions of the Federal Reserve System?
Describe the roles of government bodies that determine fiscal policy. Explain fiscal policies’ effects on the...
Describe the roles of government bodies that determine fiscal policy. Explain fiscal policies’ effects on the economy’s production and employment. How does the enormous U.S. national debt affect the federal government’s fiscal policy? Is the current U.S. national debt a serious problem like a heavy personal debt? Why or why not? Discuss thoroughly.
Describe the roles of government bodies that determine fiscal policy. Explain fiscal policies’ effects on the...
Describe the roles of government bodies that determine fiscal policy. Explain fiscal policies’ effects on the economy’s production and employment. How does the enormous U.S. national debt affect the federal government’s fiscal policy? Is the current U.S. national debt a serious problem like a heavy personal debt? Why or why not? Discuss thoroughly.
Explain Fiscal policy and Monetary policy
Explain Fiscal policy and Monetary policy
Describe Monetary Policy and Fiscal Policy in detail. 2. What are the principles of bank management?...
Describe Monetary Policy and Fiscal Policy in detail. 2. What are the principles of bank management? Do you think these principles are the essence of the banking system?
Why is fiscal policy such an important tool for government to use for improving the wellbeing...
Why is fiscal policy such an important tool for government to use for improving the wellbeing of a developing country's citizens ?
Please find (online) and explain an example of a real life percentage, and a real life...
Please find (online) and explain an example of a real life percentage, and a real life example of a rate OR ratio. You will want to find examples that come from real research (a Google search will be helpful). How are these statistics useful? What are the limitations of each (if any)? Posts should be approximately 100 words.
2) Explain the ways in which Fiscal Policy and Monetary Policy interact by using Keynesian IS...
2) Explain the ways in which Fiscal Policy and Monetary Policy interact by using Keynesian IS and LM curves. Discuss the impact of an expansionary Fiscal Policy and Monetary Policy on the overall level of economic activity. Include the conditions in which Monetary Policy would have a greater influence on GDP growth and the conditions in which Fiscal Policy would have a greater influence on GDP growth.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT