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Discretionary Fiscal Stimulus

III. Exchange Rate Policy | IV. Financing International Trade | I. Aggregate Supply | II. Aggregate Demand | The Business Cycle | I. Fixed Prices and Expenditure Plans | II. Real GDP with a Fixed Price Level | III. The Multiplier | IV. The Multiplier and the Price Level | II. Supply-Side Effects of Fiscal Policy |


Читайте также:
  1. II. Supply-Side Effects of Fiscal Policy
  2. III. Generational Effects of Fiscal Policy
  3. IV. Extraordinary Monetary Stimulus

· The effect on aggregate demand from a tax cut is less than that from a similar sized increase in government expenditure. A $1 tax cut generates less than a $1 increase in consumption expenditure since only a fraction (equal to the MPC) of the $1 increase in disposable income is spent on consumption expenditure.

Fiscal Stimulus

Fiscal Stimulus and Aggregate Supply

The focus so far has been on only aggregate demand. But fiscal policy also impacts aggregate supply.


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