Buy custom Fiscal Policy in the United States
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| Topic: |
Business
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| Number of pages / Number of words: |
4 / 868 |
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This decrease in spending also leads to a decrease in output, which will then lead to higher unemployment and a decrease in aggregate spending. When the government increases taxes it leaves households with less disposable income that can be used for consumption expenditures; which then reduces aggregate production and employment and leads to further decreases in income, thus reducing inflationary pressure...
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For instance, unemployment benefits may be decreased by a percentage, or Social Security recipients may receive a reduction in their payments, or both. This practice has the same results as increasing taxes, and it is just as unpopular.
Current Economy and Recommendations
According to the U.S. Bureau of Labor Statistics, the unemployment rate for May 2006 was 4...
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