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Smart Reasoning:

C&E

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Qaagi - Book of Why

Causes

Effects

government s actionsto influencean economy through the fiscal policy

fiscal policy ... the use of government expenditure and revenue collectionto influencethe economy fiscal policy

using government spendingto influencethe economy ( fiscal policy

the government ’s use of taxes and spendingto influencethe economy ( fiscal policy

How does the government use fiscal policyto influencethe economy within the fiscal policy

the use of government spending and revenue collectionto influencethe economy Fiscal policy

the economic powers , unstable currency , capital flight , high inflation rates and the creation of taxes such as VAT(passive) is still influenced byfiscal , economic policy

federal attemptsto influencethe economy through fiscal policy

to a larger government budget deficit or a smaller budget surplusleadsto a larger government budget deficit or a smaller budget surplus

to an increase in the U. S. budget deficit according to the United States Congressional Budget Office estimated in 2009will leadto an increase in the U. S. budget deficit according to the United States Congressional Budget Office estimated in 2009

to stimulate the economy during or one of the three fiscal policy tools available to the government sector is used frequently over the years to implement expansionary fiscal policyis designedto stimulate the economy during or one of the three fiscal policy tools available to the government sector is used frequently over the years to implement expansionary fiscal policy

to and encourage developmentleadto and encourage development

to higher government borrowingwill leadto higher government borrowing

an increased need for more borrowing by the governmentcreatesan increased need for more borrowing by the government

to increase disposable income thus leading to greater consumption expendituredesignedto increase disposable income thus leading to greater consumption expenditure

real GDP from falling below potential real GDPto preventreal GDP from falling below potential real GDP

to a significant increase in economic growthleadsto a significant increase in economic growth

a rightward shift in aggregate demand which closes the recession gap allowing an economy to grow caused by decreasing taxes and increasing spendingCausesa rightward shift in aggregate demand which closes the recession gap allowing an economy to grow caused by decreasing taxes and increasing spending

oftencreatesoften

to neoleadsto neo

so as to have more even effects across the expectations ... and no credit constraints ) , which are not likely to apply in reality affect private consumption in a similar way as temporary changes in the real interestcan be designedso as to have more even effects across the expectations ... and no credit constraints ) , which are not likely to apply in reality affect private consumption in a similar way as temporary changes in the real interest

the Federal Open Market Committee to tighten monetary policy more quicklywill promptthe Federal Open Market Committee to tighten monetary policy more quickly

to Higher interest rates , an appreciated dollar , and reduced net exports Crowding outwill leadto Higher interest rates , an appreciated dollar , and reduced net exports Crowding out

jobs ... lift demand for goods and services , and promote economic growthcan ... createjobs ... lift demand for goods and services , and promote economic growth

to inflation ... crowding out ( i.e. , the private sector is overshadowed by the public sector ) , uncertainty and instability in prices , all of which are bad for growthcan leadto inflation ... crowding out ( i.e. , the private sector is overshadowed by the public sector ) , uncertainty and instability in prices , all of which are bad for growth

a deficit in the balance of paymentscould causea deficit in the balance of payments

federal debt that must be serviced by future generationscreatesfederal debt that must be serviced by future generations

an increase in income and the interest rateleadsan increase in income and the interest rate

the central bank to undertake a faster pace of interest rate increases and begin shrinking its balance sheet sooner than expectedcould promptthe central bank to undertake a faster pace of interest rate increases and begin shrinking its balance sheet sooner than expected

GDP and unemployment level in this countryinfluencedGDP and unemployment level in this country

interest rates to rise , thereby reducing private spending , particularly investmentcausesinterest rates to rise , thereby reducing private spending , particularly investment

to a great rise in spreads because of increased policy uncertainty , and thus to substantial interest - rate crowding - outwill leadto a great rise in spreads because of increased policy uncertainty , and thus to substantial interest - rate crowding - out

This turnaround(passive) was caused byThis turnaround

to inflation ... given the intensity of slowdownto contributeto inflation ... given the intensity of slowdown

2 Lower interest rates 3will lead2 Lower interest rates 3

only rise in price level with no corresponding rise in outputwill causeonly rise in price level with no corresponding rise in output

alsocan ... leadalso

to higher outputwill leadto higher output

to increases in aggregate income as shown by the movement from points ' A ' to ' B ' in the diagram belowwill leadto increases in aggregate income as shown by the movement from points ' A ' to ' B ' in the diagram below

to combat the downturn in global growth momentumdesignedto combat the downturn in global growth momentum

higher rates of interestcauseshigher rates of interest

to a sizable deterioration of the current account of the balance of paymentswould ... however ... leadto a sizable deterioration of the current account of the balance of payments

a stronger dollar(passive) sparked bya stronger dollar

a definition challenge for the partycreatesa definition challenge for the party

the increase in price level as it caused upwards shift in the aggregate demand in the economycausedthe increase in price level as it caused upwards shift in the aggregate demand in the economy

A New Bailout BubbleIs CreatingA New Bailout Bubble

to depreciation which further simulates output 22 Heterogeneityleadsto depreciation which further simulates output 22 Heterogeneity

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Smart Reasoning:

C&E

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