Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 17

Is each of the following policies an example of expansionary or contractionary fiscal policy? Explain your answers in terms of the effect on aggregate demand.
a. The government slashes funding for the Environmental Protection Agency, without changing any other spending.
b. The government raises taxes on households making more than $250,000.
c. The government decides to fill gaps in Medicare by making it available to more people.