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Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884 Exercise 19
Fiscal Policy Priorities
In 2008, the Obama adminstration proposed the following fiscal policy actions:
(1) Increased spending on universal health insurance ($65 billion), alternative energy ($15 billion), help for homeowners ($20 billion), infrastructure ($60 billion), a scheme to pay college tuition in exchange for public service ($10 billion), and many other projects.
(2) End Bush-era tax cuts on families with incomes greater than $250,000, increase payroll taxes on high-income earners, increase the tax rate on capital gains to 25 percent, increase the tax on dividends, and end arrangements that enable corporations to lower their taxes.
Explain the potential supply-side effects of the various components of Obama's fiscal plan.
How would you expect these fiscal policy actions to change potential GDP and its growth rate?
In 2008, the Obama adminstration proposed the following fiscal policy actions:
(1) Increased spending on universal health insurance ($65 billion), alternative energy ($15 billion), help for homeowners ($20 billion), infrastructure ($60 billion), a scheme to pay college tuition in exchange for public service ($10 billion), and many other projects.
(2) End Bush-era tax cuts on families with incomes greater than $250,000, increase payroll taxes on high-income earners, increase the tax rate on capital gains to 25 percent, increase the tax on dividends, and end arrangements that enable corporations to lower their taxes.
Explain the potential supply-side effects of the various components of Obama's fiscal plan.
How would you expect these fiscal policy actions to change potential GDP and its growth rate?
Explanation
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Supply-side fiscal policy:
Supply-side ...
Macroeconomics 11th Edition by Michael Parkin
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