Topic 2 - Fiscal Policy

Question 1

Expansionary Fiscal Policy goal

Answer 1

Enhance economic growth

Question 2

Positive things about expansionary

Answer 2

Increase output and lowers unemployment

Question 3

Negative things about expansionary

Answer 3

higher public deficit, crowding gout, and higher inflation

Question 4

Contractionary Fiscal Policy goal

Answer 4

Reduce inflation (econ growth)

Question 5

Positive things about Contractionary

Answer 5

Lower public deficit and inflation

Question 6

Negative things about Contractionary

Answer 6

Decreases output and increases unemployment

Question 7

Crowding out

Answer 7

Rising public sector spending drives down or even eliminates private sector spending.