Essay
Identify each of the following as (i)part of an expansionary fiscal policy,(ii)part of a contractionary fiscal policy,or (iii)not part of fiscal policy.
a.The personal income tax rate is lowered.
b.Congress cuts spending on defense.
c.College students are allowed to deduct tuition costs from their federal income taxes.
d.The corporate income tax rate is lowered.
e.The state of Nevada builds a new tollway in an attempt to expand employment and ease traffic in Las Vegas.
Correct Answer:

Verified
a.This is expansionary fiscal policy. b....View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q84: Contractionary fiscal policy involves decreasing government purchases
Q85: If policymakers are concerned that the economy
Q86: Tax cuts on business income increase aggregate
Q87: It is _ difficult to effectively time
Q88: The government purchases multiplier is defined as<br>A)
Q90: The income tax system serves as an
Q91: The aggregate demand curve will shift to
Q92: Suppose real GDP is currently $12.5 trillion
Q93: Which of the following is a reason
Q94: Explain why the tax multiplier is different