--%>
Assignment Help - homework help

Fiscal policy actions

What possible fiscal policy actions can be taken with respect to expenses and income to accurate excess demand and deficient demand in economy?

Answer:

Fiscal measures to approved excess demand: Government expenditure on public works, public welfare, and defense and so on must be reduced. The Public expenditure on transfer payments and subsidies must be reduced. Taxes must be raised to lower disposable income with the people. Deficit financing should be limited to check the flow of money. Purchasing power must be mopped up via bigger public borrowings.

Fiscal measures to correct deficient demand: Government expenditure and investment must be raised. Transfer payments and subsidies are raised. Taxes must be reduced to raise disposable income of people. Deficit financing must be raised to increase the flow of money. Public debt must be repaid to improve purchasing power of people.

   Related Questions in Macroeconomics

  • Q : The Fed can control the Fed funds rate

    Question: Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have o

    		•
  • Q : Project Include graphs and should be 15

    Include graphs and should be 15 pages long

    		•
  • Q : From the heterodox approach From the

    From the heterodox approach, what options does the enterprise have to produce more output? What impact do these options have on its cost structure?

    		•
  • Q : Define Quantity of a good Quantity of a

    Quantity of a good: The quantity of a good which buyers demand is found out by the price of the good, income, the prices of associated goods, expectations, tastes, and the number of buyers.

    		•
  • Q : Shifting of market problem When this

    When this market starts in equilibrium at point e on S0D0 and then young American families rousingly “inherit” furniture as their baby-boomer parents shift into smaller retirement homes, then this market will tend to shift in the direction of: (i) point i.

    		•
  • Q : Declines of percentage of income paid

    Since the percentage of income paid in taxes generally declines as taxpayer income increases, standard sales taxes and “sin” taxes [for example, excise taxes upon liquor or tobacco] are illustrations of: (1) proportional t

    		•
  • Q : Receipts from taxes Why are receipts

    Why are receipts from taxes classified as revenue receipts? Answer: Receipts from taxes are classified as revenue receipts since they do not build liabilities nor r

    		•
  • Q : Principles of macroeconomics Explain

    Explain the concept of “economies of scale” and “increasing returns”.

    		•
  • Q : Resolving disequilibrium between the

    Assume that you consume bananas and apples, and the marginal utility of the last apple consumed is 6 times the marginal utility of last banana consumed. Though, the price of apples is only 3 times the price of bananas. This disequilibrium among the two goods can be re

    		•
  • Q : Describe open market operations

    Describe open market operations? What is its consequence on availability of credit? Answer: Open market operations signify the purchase and sale of government secur

    		•