Expansionary fiscal policy is most appropriate when an economy is in recession and producing below its potential GDP. Contractionary fiscal policy decreases the level of aggregate demand, either through cuts in government spending or increases in taxes.
Does increase in government spending increase GDP?
The mix of goods doesn't affect the level of GDP, as long as the total amount spent on them doesn't change. Total spending—and therefore the equilibrium level of GDP—decreases.
Rental agents, landlords, and property management companies can thrive during a recession when renting is likely to become a more appealing option, if not the only one available.
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