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Essay's paper info
| Topic: |
Business
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| Number of pages / Number of words: |
8 / 2023 |
Essay's paper body
The contractionary fiscal policy is said to decrease the total income when the economy operates beyond its potential output, i.e. inflation occurred.
How do fiscal policies stabilize the economy?
In times of recession , when the economy operates under its full potential output the government tries to lower taxes in order to provide more disposable income for the public...
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inflation occurred.
How do fiscal policies stabilize the economy?
In times of recession , when the economy operates under its full potential output the government tries to lower taxes in order to provide more disposable income for the public. In terms of the economy as a whole, this is represented in the output equation Y = C(Y - T) + I + G + NX, where a decrease in T, given a stable Y, leads to an increase in C, and ultimately to an increase in Y to its potential output...
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