Gross Domestic Product (GDP): It refers to the gross money value or the gross market value of all finished goods and the services produced by the resident and nonresident people of the country that is within that particular 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 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 and increasing the earnings of the government.

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Chapter 28, Problem 9P

To determine

Concept Introduction:

Gross Domestic Product (GDP): It refers to the gross money value or the gross market value of all finished goods and the services produced by the resident and nonresident people of the country that is within that particular 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 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 and increasing the earnings of the government.

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