CHAPTER 30 OUTLINE

CHAPTER 30 OUTLINE - Economics Chapter 30 Fiscal...

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Economics Chapter 30 Fiscal Policy—Consists of deliberate changes in government spending and tax collections designed to achieve full employment. (fiscal= financial) Council of Economic Advisors (CEA)—A group of three economists appointed by the president to provide expertise and assistance on economic matters. Discretionary Changes-- Do not happen automatically, are at the option of the federal government. Expansionary Fiscal Policy—When recession occurs—uses increases in government spending or tax cuts to push the economy out of recession. Increased Government Spending—Will shift the economy’s aggregate demand curve to the right. Tax Reductions—Will also shift the aggregate demand curve to the right. Budget Deficit—Government spending in excess of tax revenues. Combined Government Spending Increases and Tax Reductions—Produce the desired initial increase in spending and the eventual increase in aggregate demand and real GDP. Contractionary Fiscal Policy—Uses decreases in government spending or increases in taxes to reduce
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This note was uploaded on 10/01/2010 for the course ECO 2013 taught by Professor Haroldj.vanboven during the Fall '09 term at Edison State College.

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CHAPTER 30 OUTLINE - Economics Chapter 30 Fiscal...

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