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Increased mortgage costs will also reduce market demand in the housing market
? Business investment may also fall, as the cost of borrowing funds will increase. Some planned investment projects will now become unprofitable and, as a result, aggregate demand will fall.
? Higher interest rates could also be used to limit monetary inflation. A rise in real interest rates should reduce the demand for lending and therefore reduce the growth of broad money.
? Higher direct taxes (causing a fall in disposable income)
? Lower Government spending
? A reduction in the amount the government sector borrows each year (PSNCR)
These fiscal policies increase the rate of leakages from the circular flow and reduce injections into the circular flow of income and will reduce demand pull inflation at the cost of slower growth and unemployment...
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Common topics in this essay:
- Government Policy and How Economy is Affected
- Public/Private Sector Unions
- ROI in the Public Sector
- Sector of industries - growth and decline
- Understanding the Public Sector
- What actions might a government take in order to reduce the rate of inflation in the economy?
- Running Head: What Can Be Done To Improve The Public's Perception Of Civil Service For Government Employees?
- Coming Challenges For Public Sector
- Government Should Establish Program To Reduce Juvenile Crime
- Impact Of India’s Economic Growth In Agriculture Sector
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- The Federal and State Minimum Wage Growth, and Inflation
- why is the growth in the public sector associated with the crisis in masculinity?
- Leadership in the public sector
- Systems Development Life Cycles: Private to Public Sector
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