Explain how a "conservative" and a "liberal" might differ in the types of policies they advocate to counteract a recessionary gap
Conservatives tend to want a smaller government sector. In such a case, expansionary fiscal policy would take the form of tax cuts. This would diminish the size of the government's share of total income. The aggregate demand curve would shift outward due to an increase in private spending, namely consumers and businesses. Liberals usually tend to favor an expanded government sector. In such a case, expansionary fiscal policy would call for an increase in government spending. This increase in the government's share of the economy would shift the aggregate demand curve outward by increasing the production of public goods and services, such as education or public health care.
You might also like to view...
Human capital refers to the accumulated skills and training that workers possess
Indicate whether the statement is true or false
International trade is advantageous because trade makes it possible for people in each country to
a. import more than they export. b. export more than they import. c. employ more of their domestic resources producing things that are costly for them to produce domestically. d. acquire goods from foreigners more economically than they could be produced domestically. e. do all of the above.
If a firm refuses to hire any minorities due to a personal prejudice, its profits
a. will increase markedly. b. will not be affected. c. will increase slightly. d. will decrease.
As growth progresses and countries become richer, pollution tends to fall.
Answer the following statement true (T) or false (F)