An intended goal of expansionary fiscal policy and an easing of monetary policy is Select one: a. the equalization of the distribution of income. Governments pursue an expansionary fiscal policy to increase aggregate demand (usually via deficit spending) when they want to make the economy grow. The goal of expansionary fiscal policy is to increase employment. Governments can intervene directly in the economy by increasing or decreasing their purchases, a fiscal policy tool called government spending. There are two main tools of fiscal policy: government spending and tax rates. The goal of expansionary fiscal policy such as an. Accessed Jan. 31, 2020. As a result, politicians who use contractionary policy are soon voted out of … If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. "Recession to Recovery, 1960-62, A Case Study in Flexibility Monetary Policy." Expert solutions for 11.The goal of expansionary fiscal policy is to increase: A. Correct answer to the question With regards to economic growth, what is the goal of an expansionary fiscal policy - e-eduanswers.com Treasury Department. Charles is a nationally recognized capital markets specialist and educator with over 30 years of experience developing in-depth training programs for burgeoning financial professionals. This will put the country on a course to a level of deficits below 3 percent of GDP by the end of the decade, and will also allow us to stabilize the Federal debt relative to the size of the economy. The goal of fiscal policy with regard to economics is to either stimulate the economy or slow it down. Accessed Jan. 31, 2020. Expansionary fiscal policy works fast if done correctly. Congressional Research Service. "What Is the Difference Between Mandatory and Discretionary Spending?" Congress has two types of spending. Added 8/23/2016 1:58:52 AM. This answer has been confirmed as correct and helpful. b. an increase in the price level. Governments aim to stimulate the economy by directly engaging in expansionary activities through increased spending. Performance & security by Cloudflare, Please complete the security check to access. "The Role of the Treasury." “Sen. "The True State of the Consumer Isn’t Seen in Retail Sales." What Is the Difference Between Mandatory and Discretionary Spending? Log in or sign up first. The goal of expansionary fiscal policy is to increase employment. Accessed Jan. 31, 2020. That increases the money supply, lowers interest rates, and increases demand. Accessed Jan. 31, 2020. The intended goal of expansionary fiscal policy a. an increase in the level of aggregate output (GDP). History, 21.06.2019 18:00, usagimiller. How Have Democratic Presidents Affected the Economy? Congress.gov. Rating. What the Government Does to Control Unemployment? Federal Reserve Bank of St. Louis. The idea is that by putting more money into the hands of consumers, the government can stimulate economic activity during times of economic contraction (for example, during a recession or during the contractionary phase of the business cycle). For example, they might cut taxes to become more popular with voters before an election. An expansionary policy is a macroeconomic policy that seeks to expand the money supply to encourage economic growth or combat inflationary price increases. Log in for more information. Tax cuts can put money into the hands of consumers if the government can send out rebate checks right away. The fastest method is to expand unemployment compensation. They can also increase benefits payments in mandatory programs, which is more difficult because it requires a 60-vote majority in the Senate to pass. The largest mandatory programs are Social Security, Medicare, and welfare programs. Sometimes these payments are called transfer payments because they reallocate funds from taxpayers to targeted demographic groups.. Accessed Jan. 31, 2020. The Obama administration used expansionary policy with the Economic Stimulus Act. The American Recovery and Reinvestment Act cut taxes, extended unemployment benefits, and funded public works projects. The law, which was enacted in 2009, was meant to stimulate the weakening economy, costing $787 billion in tax cuts and government spending. All this occurred while tax receipts dropped, thanks to the 2008 financial crisis. Politicians often use expansionary fiscal policy for reasons other than its real purpose. Add an answer or comment. Add your answer and earn points. Expansionary policy can do this by: increasing consumption by raising disposable income through … Otherwise, it grows to unsustainable levels. Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. Obama White House. Democrat or Republican: Which Political Party Has Grown the Economy More? Its goal is to slow economic growth and stamp out inflation. Expansionary Fiscal Policy There are two types of fiscal policy. Expansionary policy is used more often than its opposite, contractionary fiscal policy. That's dangerous because it creates asset bubbles, and when the bubble bursts, you get a downturn. Some Economists Claim It Is Due To Indirect Crowding Out. You may need to download version 2.0 now from the Chrome Web Store. Your IP: 94.23.250.140 Federal Reserve Board. The main drawback is that tax cuts decrease government revenue, which can create a budget deficit that's added to the debt. Although reversing tax cuts is often an unpopular political move, it must be done when the economy recovers to pay down the debt. Roosevelt returned to expansionary fiscal policy to gear up for World War II.. Expansionary fiscal policy is increases in government spending or tax cuts designed to increase aggregate demand and … Expansionary Fiscal Policy.
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