what are 2 contractionary fiscal policy tools? *\n□ increase taxes\n□ decrease taxes\n□ increase government…

what are 2 contractionary fiscal policy tools? *\n□ increase taxes\n□ decrease taxes\n□ increase government spending\n□ decrease government spending\nwhich of the following is true? *\n□ current - uses the value or the dollar of each current year\n□ constant - use the same value of one year for every year

what are 2 contractionary fiscal policy tools? *\n□ increase taxes\n□ decrease taxes\n□ increase government spending\n□ decrease government spending\nwhich of the following is true? *\n□ current - uses the value or the dollar of each current year\n□ constant - use the same value of one year for every year

Answer

Brief Explanations:

  1. For the first question, contractionary fiscal policy aims to reduce aggregate demand. Increasing taxes takes more money out of consumers' and businesses' hands, reducing spending. Decreasing government spending directly reduces the amount of money flowing into the economy, also curbing demand.
  2. For the second question, current - dollar values use the value of the dollar in each current year, accounting for inflation and price changes. Constant - dollar values use the same value of one year (a base - year) for every year to compare real changes in output or other economic variables without the effect of price changes.

Answer:

  1. Increase taxes, Decrease government spending
  2. current - uses the value or the dollar of each current year, constant - use the same value of one year for every year