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03

Fiscal Policy in the United States

   
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Title: Fiscal Policy in the United States
 
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Subject: Business
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Date: July 24, 2004
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Length: 4 / 868
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It is the practice of decreasing government purchases of goods and services, increasing net taxes, or some combination of the two for the purpose of decreasing aggregate demand and thus controlling inflation. The goal of contractionary fiscal policy is to close an inflationary gap, restrain the economy, and decrease the inflation rate...
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The goal of contractionary fiscal policy is to close an inflationary gap, restrain the economy, and decrease the inflation rate. When the government spends less than the amount of tax revenues, there is a budget surplus and the deficit is reduced. This decrease in spending also leads to a decrease in output, which will then lead to higher unemployment and a decrease in aggregate spending...
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