A political commentator argues Congress and the President ar

A political commentator argues: \"Congress and the President are more likely to enact an expansionary fiscal policy than a contractionary fiscal policy because expansionary policies are popular and contractionary policies are unpopular\".   Explain whether you agree or disagree. Please use your words.

Solution

It\'s the question of which policy will work better at given particular financial scenario

The goal of expansionary fiscal policy is to close a recessionary gap, stimulate the economy, and decrease the unemployment rate. Expansionary fiscal policy is often supported by expansionary monetary policy. An alternative is contractionary fiscal policy

If policymakers decide to implement an expansionary policy, then they should raise government spending or lower taxes. If they decide to implement a contractionary policy, then they should lower government spending or raise taxes.

Expansionary fiscal policy is designed to stimulate the economy during or anticipation of a business-cycleExpansionary fiscal policy is designed to stimulate the economy during or anticipation of a business-cycle contraction. This is accomplished by increasing aggregate expenditure and aggregate demand through an increase in government spending (both govt purchase and transfer payment ) or a decrease in taxes. Expansionary fiscal policy leads to a larger government budget deficit or a smaller budget surplus. This is accomplished by increasing aggregate expenditure and aggregate demand through an increase in government spending (both govt surplus and transfer payments) or a decrease in taxes. Expansionary fiscal policy leads to a larger government budget deficit or a smaller budget surplus.

Government purchases are expenditures by the government sector, especially those by the federal government, on final goods or services. It is that portion of GDP purchased by governments.

These purchases are used to buy everything from aircraft carriers to paper clips, from office furniture to highway construction, from traffic lights to teacher salaries. The actual purchases are typically undertaken by individual government agencies

xpansionary fiscal policy involves an increase in the funds appropriated to these assorted agencies. The agencies then make the additional purchases which stimulate aggregate production, boost income, and increase the level of employment.

While an increase in government purchases have been used frequently over the years to implement expansionary fiscal policy, it can be a relatively involved process. Moreover, additional government purchases leads to a relatively larger government sector. For these reason, policy makers often opt for the second fiscal policy tool taxes.