What happens to tax receipts and
government transfer payments when the economy enters a
Tax receipts increase and transfer
Tax receipts decrease and transfer
When he first took office in 1993,
President Clinton proposed an economic package that he
said would give the economy a fiscal stimulus and cut the
size of the government deficit over the next five years.
From our knowledge of macroeconomic policy, how should we
assess this proposal?
Both of these goals go together so
there will be no problems.
These goals are opposed, so achieving
one is done at the expense of the other.
The first goal is a problem of fiscal
policy while the second is a problem of monetary
Macroeconomics has nothing to say
about these goals.