Question

Connections: Countercyclical Fiscal Policies: Domestic US Market

Always conducted by ____________


Fighting Inflation:

Policy Name =

Taxes =

Gov. Spending =

Budget Result =



Aggregate Model:

C should =

G should =

AD should =



Money Market:

DM will=

i should=

(Ig on Aggregate Model will)=



Loanable Funds…Market:

The budget issue will cause:

S LF =

DLF =

Answer 1

Answer: Please see answer below

Explanation: Countercyclical Fiscal Policies

Domestic US Market

Always conducted by Congress

Fighting Inflation:

Policy Name = Contractionary

Taxes = Raise

Gov. Spending = Decrease

Budget Result = Surplus

Aggregate Model:

C should = decrease

G should =decrease

AD should =decrease

Money Market:

DM will= decrease

i should= decrease

(Ig on Aggregate Model will)=

increase

Loanable Funds…Market:

The budget issue will cause:

S LF =increase

DLF =decrease