Question

How can expansionary and contractionary tax policies be used to manage the economy?

Be sure to give your answer in two to three sentences.


PLEASE HELP ASAP!! thanx

Answer 1

Expansionary and contractionary policies can be used to encourage or discourage economic growth. Expansionary policies generally lower taxes and give consumers and producers additional money, which encourages spending and growth. This is done when unemployment is high. On the other hand, contractionary policies generally raise taxes, which can give consumers and producers less to spend. This can cause less economic growth, but is necessary when the economy is growing too quickly and inflation is rising.

Answer 2

Expansionary and contractionary policies can be utilized to support or debilitate financial development. Expansionary policies by and large lower duties and give customers and makers extra cash, which supports spending and development. Then again, contractionary arrangements for the most part raise charges or taxes, which can give purchasers and makers less to spend. This can cause less monetary development.