Read the following excerpts. Identify whether the policy action is fiscal or monetary and expansionary or contractionary. Draw and label the change that would occur on the ADAS graph as a result of the policy action described in each. Identify what will happen as a result of the policy to the price level, employment, and real GDP. Excerpt from Public Law 103-66 of the 103rd Congress: Signed into law by President Clinton August 10, 1993 “To provide for reconciliation pursuant to section 7 of the concurrent resolution on the budget for fiscal year 1994. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. Title XIII: Revenue, Health Care, Human Resources, Income Security, Customs and Trade, Food Stamp Program, and Timber Sale Provisions …Subchapter B: Revenue Increases - Increases the marginal tax rate for certain higher incomes. Imposes a surtax on certain higher incomes. Sec. 13203 Increases the tentative minimum tax for taxpayers other than corporations. Sec. 13204 Makes permanent the overall limitation on itemized deductions and the phaseout of personal exemptions for high-income taxpayers…” ADAS Model Graph-3.JPG
Read the following excerpts. Identify whether the policy action is fiscal or monetary and expansionary or contractionary. Draw and label the change that would occur on the ADAS graph as a result of the policy action described in each. Identify what will happen as a result of the policy to the price level, employment, and real GDP.
Excerpt from Public Law 103-66 of the 103rd Congress: Signed into law by President Clinton August 10, 1993 “To provide for reconciliation pursuant to section 7 of the concurrent resolution on the budget for fiscal year 1994. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. Title XIII: Revenue, Health Care, Human Resources, Income Security, Customs and Trade, Food Stamp Program, and Timber Sale Provisions …Subchapter B: Revenue Increases - Increases the marginal tax rate for certain higher incomes. Imposes a surtax on certain higher incomes. Sec. 13203 Increases the tentative minimum tax for taxpayers other than corporations. Sec. 13204 Makes permanent the overall limitation on itemized deductions and the phaseout of personal exemptions for high-income taxpayers…”
ADAS Model Graph-3.JPG
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