3.4 Fiscal Policy

    Cards (50)

    • Match the tax type with its description:
      Income taxes ↔️ Levied on personal and corporate earnings
      Sales taxes ↔️ Charged on goods and services
      Property taxes ↔️ Assessed on real estate ownership
    • Match the type of fiscal policy with its effect on the economy:
      Expansionary ↔️ Increases aggregate demand, boosts growth
      Contractionary ↔️ Decreases aggregate demand, curbs inflation
    • Steps involved in using fiscal policy to manage economic fluctuations:
      1️⃣ Assess the current economic conditions
      2️⃣ Determine the economic objectives
      3️⃣ Choose the appropriate fiscal policy type
      4️⃣ Implement the policy
      5️⃣ Monitor the economic effects
    • Government spending increases aggregate demand, which in turn stimulates economic growth
    • Government spending increases aggregate demand.
    • Contractionary fiscal policy aims to curb inflation.
    • Time lags in fiscal policy implementation can reduce its effectiveness.
    • Government spending on infrastructure projects stimulates economic growth.

      True
    • Taxation involves collecting revenue from individuals and businesses through various forms of taxes
    • Taxation reduces disposable income and may slow spending.

      True
    • Expansionary fiscal policy increases government spending or reduces taxes.

      True
    • Expansionary fiscal policy leads to higher aggregate demand
    • Expansionary fiscal policy can boost economic growth and employment.
      True
    • Fiscal policy can control inflation through its influence on aggregate demand
    • Fiscal policy works alongside monetary policy to manage liquidity and control inflation
    • Increasing government spending on infrastructure is an example of expansionary fiscal policy.

      True
    • Introducing a carbon tax is an example of contractionary fiscal policy.

      True
    • Fiscal policy is rooted in Keynesian economics, which advocates for active government intervention.

      True
    • Taxation reduces disposable income, which may slow consumer spending.

      True
    • Contractionary fiscal policy reduces government spending or raises taxes to slow inflation.
      True
    • Fiscal policy is primarily used to stabilize the economy, promote growth, and reduce unemployment.

      True
    • What is the effect of taxation on disposable income?
      Reduces disposable income
    • What is the primary effect of expansionary fiscal policy on aggregate demand?
      Increases aggregate demand
    • Expansionary fiscal policy can lead to higher employment.

      True
    • What does contractionary fiscal policy reduce to lower inflation?
      Disposable income
    • Order the steps involved in fiscal policy implementation:
      1️⃣ Define economic objectives
      2️⃣ Choose fiscal policy tools
      3️⃣ Implement policy changes
      4️⃣ Monitor economic effects
    • Match the type of government spending with an example:
      Infrastructure projects ↔️ Building roads and bridges
      Social programs ↔️ Funding healthcare and education
      Defense spending ↔️ Allocating resources to national security
    • Government spending increases aggregate demand and stimulates economic growth.

      True
    • Government spending on infrastructure projects increases aggregate demand
    • Order the steps of implementing fiscal policy:
      1️⃣ Identify economic objectives
      2️⃣ Choose expansionary or contractionary policy
      3️⃣ Implement policy changes
      4️⃣ Monitor economic effects
    • Contractionary fiscal policy can slow down the economy and lower employment.

      True
    • Expansionary fiscal policy can increase inflation if demand rises too quickly.

      True
    • Order the limitations of fiscal policy from most to least immediate impact on the economy:
      1️⃣ Political influences
      2️⃣ Time lags
      3️⃣ Crowding out
      4️⃣ Government effectiveness
    • Decreasing funding for social welfare programs is an example of contractionary fiscal policy
    • Fiscal policy is the use of government spending and tax policies to influence economic conditions.stabilize
    • Government spending increases aggregate demand, which in turn stimulates economic growth
    • Expansionary fiscal policy aims to stimulate the economy by increasing government spending or reducing taxes
    • Taxation reduces disposable income, which may slow consumer spending.

      True
    • Taxation may slow consumer spending.

      True
    • Order the effects of expansionary fiscal policy on the economy:
      1️⃣ Increases government spending or reduces taxes
      2️⃣ Higher aggregate demand
      3️⃣ Boosts economic growth
      4️⃣ Reduces unemployment
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