2019 Nov (Fiscal Policy) Paper 3 HL
· An increase in Gs (government spending) is direct since Gs is a component of aggregate demand or since infrastructure or subsidies can be targeted towards key areas.
· Spending by the government will often directly increase employment (or decrease unemployment) and thus confidence levels.
· There may be the multiplier effect as incomes rise consumption rises also.
· Lowering income taxes increases disposable income and thus may positively affect spending as well as confidence levels.
No comments:
Post a Comment