Chapter 13, Problem 9P

To determine

Concept Introduction:

Gross Domestic Product (GDP): It refers to the gross money value or gross market value of all the finished goods and the services produced by the normal resident and nonresident of the country that is within that particular within the borders of the country in an accounting year.

Expansionary Fiscal policy: This policy is followed by the government to expand the production activities in the economy, this is done by increasing the expenses of the government and cutting the earnings of the government.

Contractionary Fiscal policy: This policy is followed by the government to contract the production activities in the economy, this is done by reducing the expenses of the government and increasing the earnings of the government.