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4) contractionary fiscal policy and its effects on the economy and Federal budget.

4) contractionary fiscal policy and its effects on the economy and Federal budget.

5) Which curve (AD or SRAS) will be affected and which direction (leftward or rightward) it will shift when the Congress increases the income tax?

6) Which curve (AD or SRAS) will be affected and which direction (leftward or rightward) it will shift when the Congress goes to war against Canada?

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Ans. 4) Contractionary fiscal policy involves increasing the level of taxes or decreasing government expenditure or both in... View the full answer

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