Explain the difference between expansionary and contractionary fiscal policies
Define key terms: Expansionary - Used in deflationary gap to cause AD to shift right an stimulate economic growth (accelerator) and Fiscal - A set of government policies that increase the quantity and quality of the factors of production in a given economy by using taxation and government spending.
Draw diagram and explain it using real life example e.g. 2008 depression when the UK government bailed out the banks.
MD
Related Economics IB answers
All answers ▸Under what conditions can a firm sell the same product at different prices?
Distinguish between direct and indirect tax.
How does the imposition of a tariff on the market for cigarettes in Italy affect its consumers and producers?
Discuss the possible consequences of the imposition of an indirect tax on cigarettes for the different stakeholders in the market.