Question: 1/ What is the main difference between discretionary spending and mandatory spending? 2/ Explain why increasing government purchases of goods and services is expansionary fiscal

1/ What is the main difference between discretionary spending and mandatory spending?

2/ Explain why increasing government purchases of goods and services is expansionary fiscal policy. Would increasing taxes or reducing transfer payments be contractionary or expansionary? Why?

3/ Explain why changes in tax rates affect both aggregate demand and aggregate supply.

4/ What is one benefit to businesses when the government budget is in surplus?

5/ How might interest paid on the national debt lead to greater income inequality?

6/ What factors determine whether the national debt is a cause for immediate concern?

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