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A tax reduction can be used as an expansionary fiscal policy tool to expand the economy. Do you...

Question:

A tax reduction can be used as an expansionary fiscal policy tool to expand the economy. Do you believe that a tax increase on the rich will hurt the economy? Justify your answer.

Taxation and Government:

Taxes are a very important political subject for the majority of the population. Almost no one wants to pay more taxes themselves, yet many want society as whole to share burdens for projects. Some even equate taxation with theft as the government uses force to collect money.

Answer and Explanation: 1

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Answer: Yes

An tax increase on the rich hurts the economy more than just a decrease in spending. It hurts the economy in the long-run. This is...

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Discretionary Fiscal Policy: Definition & Examples

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Chapter 25 / Lesson 20
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Learn about discretionary policy. Study the discretionary fiscal policy definition, and discover examples of expansionary and contractionary policies.


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