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Solved: In each of the following cases, determine whether the policy is an expansionary
Chapter 0, Problem 1(choose chapter or problem)
In each of the following cases, determine whether the policy is an expansionary or contractionary fiscal policy: a. Several military bases around the country, which together employ tens of thousands of people, are closed. b. The number of weeks an unemployed person is eligible for unemployment benefits is increased. c. The federal tax on gasoline is increased.
Questions & Answers
QUESTION:
In each of the following cases, determine whether the policy is an expansionary or contractionary fiscal policy: a. Several military bases around the country, which together employ tens of thousands of people, are closed. b. The number of weeks an unemployed person is eligible for unemployment benefits is increased. c. The federal tax on gasoline is increased.
ANSWER:Step 1 of 4
The government uses fiscal policy to boost the economy. Here, in this policy, taxes and government spending are used. The fiscal policy can be expansionary or contractionary.