Macro - Government Expenditure (G)

Question 1

the trade cycle

Answer 1

How the economy tends to show recurring trends in economic growth.
Booms tend to be followed by economic slumps or slowdowns.

Question 2

Fiscal policy

Answer 2

Fiscal Policy is also known as a demand side policy and involves changes in government spending and taxation by the government in order to influence AD

Question 3

Tight fiscal policy

Answer 3

Tight fiscal also known as contractionary is used to reduce AD by lowering spending or increasing taxation

Question 4

Loose fiscal policy

Answer 4

Loose fiscal also known as expansionary is used to increase AD by increasing government spending and lowering taxation.