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DEMAND DECREASE: A decrease in the willingness and ability of buyers to buy a good at the existing price, illustrated by a leftward shift of the demand curve. A decrease in demand results in a decrease in equilibrium quantity and a decrease in equilibrium price.

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Lesson 12: Business Cycles | Unit 5: Policies Page: 24 of 26

Topic: Expansionary <=PAGE BACK | PAGE NEXT=>

Expansionary policies avoid or limit the problems of business cycle contractions.
  • Expansionary fiscal policy is increasing government spending or reducing taxes. More spending can offset the decline in investment, directly. Lower taxes leaves households with more income from consumption.
  • Expansionary monetary policy is increasing in the amount of money in circulation. More money means more spending.

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TAXATION BASICS

Taxes are mandatory payments from members of society to governments. The total tax revenue collected from a specific tax can be identified as the product of the tax rate times the tax base. The tax base can be specified as either a physical quantity or monetary value, giving rise to two types of tax per unit tax (quantity) and ad valorem tax (value). In some cases it is useful to specify a tax rate as an average tax rate and in other cases as a marginal tax rate.

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APLS

PINK FADFLY
[What's This?]

Today, you are likely to spend a great deal of time surfing the Internet trying to buy either one of those memory foam pillows or a remote controlled train set. Be on the lookout for slightly overweight pizza delivery guys.
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This isn't me! What am I?

Lewis Carroll, the author of Alice in Wonderland, was the pseudonym of Charles Dodgson, an accomplished mathematician and economist.
"The mediocre teacher tells. The good teacher explains. The superior teacher demonstrates. The great teacher inspires."

-- William Ward ‚ Texas Wesleyan University Administrator

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