The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.

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Answer 1

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 16, Problem 1P

To determine

To explain:

The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.

Expert Solution & Answer

Explanation of Solution

Fiscal policy is similar to the monetary policy applied by central banks to maintain the flow of cash in the economy. The reason behind the increase in deficit is considered expansionary fiscal policy is thatit expands the money supply in the economy to increase the economic growth by combating the inflation. The expansionary fiscal policy will increase the government spending or reduces the taxes. These steps will lead to shortage of funds and will diminish the surplus.

The fiscal government actions that decrease the deficits are considered as contractionary fiscal policy. This is because a decrease in deficit reduces the money supply, which decreases the demand. This will in turn reduce the purchasing power of consumers as well. The contractionary fiscal policy is that situation when the consumers are left with less amount to spend.

Economics Concept Introduction

Fiscal policy:

That means in economics through which a federal government keeps a check and adjusts its expenditure level and tax rates, or duty charge is referred as fiscal policy. This policy helps to monitor and guide the country's economic situation.

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Answer 2

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 16, Problem 1P

To determine

To explain:

The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.

Expert Solution & Answer

Explanation of Solution

Fiscal policy is similar to the monetary policy applied by central banks to maintain the flow of cash in the economy. The reason behind the increase in deficit is considered expansionary fiscal policy is thatit expands the money supply in the economy to increase the economic growth by combating the inflation. The expansionary fiscal policy will increase the government spending or reduces the taxes. These steps will lead to shortage of funds and will diminish the surplus.

The fiscal government actions that decrease the deficits are considered as contractionary fiscal policy. This is because a decrease in deficit reduces the money supply, which decreases the demand. This will in turn reduce the purchasing power of consumers as well. The contractionary fiscal policy is that situation when the consumers are left with less amount to spend.

Economics Concept Introduction

Fiscal policy:

That means in economics through which a federal government keeps a check and adjusts its expenditure level and tax rates, or duty charge is referred as fiscal policy. This policy helps to monitor and guide the country's economic situation.

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Answer 3

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 16, Problem 1P

To determine

To explain:

The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.

Expert Solution & Answer

Explanation of Solution

Fiscal policy is similar to the monetary policy applied by central banks to maintain the flow of cash in the economy. The reason behind the increase in deficit is considered expansionary fiscal policy is thatit expands the money supply in the economy to increase the economic growth by combating the inflation. The expansionary fiscal policy will increase the government spending or reduces the taxes. These steps will lead to shortage of funds and will diminish the surplus.

The fiscal government actions that decrease the deficits are considered as contractionary fiscal policy. This is because a decrease in deficit reduces the money supply, which decreases the demand. This will in turn reduce the purchasing power of consumers as well. The contractionary fiscal policy is that situation when the consumers are left with less amount to spend.

Economics Concept Introduction

Fiscal policy:

That means in economics through which a federal government keeps a check and adjusts its expenditure level and tax rates, or duty charge is referred as fiscal policy. This policy helps to monitor and guide the country's economic situation.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 16, Problem 1P

To determine

To explain:

The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.

Expert Solution & Answer

Explanation of Solution

Fiscal policy is similar to the monetary policy applied by central banks to maintain the flow of cash in the economy. The reason behind the increase in deficit is considered expansionary fiscal policy is thatit expands the money supply in the economy to increase the economic growth by combating the inflation. The expansionary fiscal policy will increase the government spending or reduces the taxes. These steps will lead to shortage of funds and will diminish the surplus.

The fiscal government actions that decrease the deficits are considered as contractionary fiscal policy. This is because a decrease in deficit reduces the money supply, which decreases the demand. This will in turn reduce the purchasing power of consumers as well. The contractionary fiscal policy is that situation when the consumers are left with less amount to spend.

Economics Concept Introduction

Fiscal policy:

That means in economics through which a federal government keeps a check and adjusts its expenditure level and tax rates, or duty charge is referred as fiscal policy. This policy helps to monitor and guide the country's economic situation.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1P

To determine

To explain:

The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.

Expert Solution & Answer

Explanation of Solution

Fiscal policy is similar to the monetary policy applied by central banks to maintain the flow of cash in the economy. The reason behind the increase in deficit is considered expansionary fiscal policy is thatit expands the money supply in the economy to increase the economic growth by combating the inflation. The expansionary fiscal policy will increase the government spending or reduces the taxes. These steps will lead to shortage of funds and will diminish the surplus.

The fiscal government actions that decrease the deficits are considered as contractionary fiscal policy. This is because a decrease in deficit reduces the money supply, which decreases the demand. This will in turn reduce the purchasing power of consumers as well. The contractionary fiscal policy is that situation when the consumers are left with less amount to spend.

Economics Concept Introduction

Fiscal policy:

That means in economics through which a federal government keeps a check and adjusts its expenditure level and tax rates, or duty charge is referred as fiscal policy. This policy helps to monitor and guide the country's economic situation.

Answer 6

Chapter 16, Problem 1P

To determine

To explain:

The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.

Expert Solution & Answer

Explanation of Solution

Fiscal policy is similar to the monetary policy applied by central banks to maintain the flow of cash in the economy. The reason behind the increase in deficit is considered expansionary fiscal policy is thatit expands the money supply in the economy to increase the economic growth by combating the inflation. The expansionary fiscal policy will increase the government spending or reduces the taxes. These steps will lead to shortage of funds and will diminish the surplus.

The fiscal government actions that decrease the deficits are considered as contractionary fiscal policy. This is because a decrease in deficit reduces the money supply, which decreases the demand. This will in turn reduce the purchasing power of consumers as well. The contractionary fiscal policy is that situation when the consumers are left with less amount to spend.

Economics Concept Introduction

Fiscal policy:

That means in economics through which a federal government keeps a check and adjusts its expenditure level and tax rates, or duty charge is referred as fiscal policy. This policy helps to monitor and guide the country's economic situation.

Answer 7

Chapter 16, Problem 1P

To determine

To explain:

The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.

Answer 8

Expert Solution & Answer

Explanation of Solution

Fiscal policy is similar to the monetary policy applied by central banks to maintain the flow of cash in the economy. The reason behind the increase in deficit is considered expansionary fiscal policy is thatit expands the money supply in the economy to increase the economic growth by combating the inflation. The expansionary fiscal policy will increase the government spending or reduces the taxes. These steps will lead to shortage of funds and will diminish the surplus.

The fiscal government actions that decrease the deficits are considered as contractionary fiscal policy. This is because a decrease in deficit reduces the money supply, which decreases the demand. This will in turn reduce the purchasing power of consumers as well. The contractionary fiscal policy is that situation when the consumers are left with less amount to spend.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Fiscal policy:

That means in economics through which a federal government keeps a check and adjusts its expenditure level and tax rates, or duty charge is referred as fiscal policy. This policy helps to monitor and guide the country's economic situation.

Answer 12

Ch. 16 - Prob. 1P Ch. 16 - Prob. 2P Ch. 16 - Prob. 3P Ch. 16 - Prob. 4P Ch. 16 - Prob. 5P Ch. 16 - Prob. 6P Ch. 16 - Prob. 7P Ch. 16 - Prob. 8P Ch. 16 - Prob. 9P Ch. 16 - Prob. 10P

The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.

To explain: The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.

Explanation of Solution

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Chapter 16 Solutions

To explain:

The reason for government actions increasing deficits is considered expansionary fiscal policy and government actions decreasing deficits is considered contractionary policy.