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The goal of expansionary fiscal policy is to reduce unemployment Therefore the tools would be an increase in government spending andor a decrease in taxes.

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An alternative is contractionary fiscal policy Expansionary fiscal policy is designed to stimulate the economy during or anticipation of a business-cycle contraction.

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In a recession an expansionary fiscal policy involves lowering taxes and increasing government spending In an overheated expansion a contractionary fiscal.

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If followed persistently low interest rates fall, or delays could create new production possibilities curve shifts toward hiring workers.

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