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kenzie126:

How can government make the economy grow? How can government slow the economy down?

mxddi3:

ok do you know what fiscal policies are?

kenzie126:

kinda

mxddi3:

ok tell me what you know about it

kenzie126:

its used by government of taxes, spending, and changes in entitlements to keep the economy stable by affecting total demand for goods and services

kenzie126:

thats what i have in my notes from class

russianmafiya:

How can government slow the economy down? Governments can use wage and price controls to fight inflation, but that can cause recession and job losses. Governments can also employ a contractionary monetary policy to fight inflation by reducing the money supply within an economy via decreased bond prices and increased interest rates. How can government make the economy grow? A government can try to influence the rate of economic growth through demand-side and supply-side policies, Expansionary fiscal policy – cutting taxes to increase disposable income and encourage spending. However, lower taxes will increase the budget deficit and will lead to higher borrowing.

mxddi3:

yeah so fiscal policy is the use of government revenue collection and expenditure to influence a country's economy. this would include taxes. do you know what they can do with taxes to improve economy?

kenzie126:

no

russianmafiya:

\(\color{#0cbb34}{\text{Originally Posted by}}\) @kenzie126 How can government slow the economy down? Governments can use wage and price controls to fight inflation, but that can cause recession and job losses. Governments can also employ a contractionary monetary policy to fight inflation by reducing the money supply within an economy via decreased bond prices and increased interest rates. How can government make the economy grow? A government can try to influence the rate of economic growth through demand-side and supply-side policies, Expansionary fiscal policy – cutting taxes to increase disposable income and encourage spending. However, lower taxes will increase the budget deficit and will lead to higher borrowing. \(\color{#0cbb34}{\text{End of Quote}}\)

mxddi3:

so,decreasing government spending and keeping taxes the same OR decreasing taxes and keeping pending the same can reduce unemployment. does this make sense?

kenzie126:

What is the Federal Reserve/Fed?

mxddi3:

the central banking system of america

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