Explain how a “conservative” and a “liberal” might differ in the types of policies they advocate to counteract a recessionary gap.
What will be an ideal response?
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.
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According to the theory of demand,
a. a change in the consumer’s income or wealth changes the entire demand relationship b. the consumer’s willingness to pay is also called the demand price c. demand price measures the marginal benefit (MB) of consuming another unit of the good d. a change in product price changes quantity demanded e. all of the above
When attempting to decrease the federal funds rate, the Fed can
A) increase reserve requirements. B) engage in an open market purchase. C) increase the discount rate. D) raise the interest rate paid on bank reserves.
If more is better, how can you explain that more pollution doesn't violate this principle?
What will be an ideal response?
Which of the following is an example of positive statement?
A. The state government should allocate more funds toward education. B. Teachers should be paid higher salaries. C. Individuals with a bachelor's degree earn higher average incomes than those with only a high school diploma. D. The consumption of marijuana is unacceptable and should never be legally allowed in a society.