CHAPTER 10 Fiscal Policy Exhibit 1 Fiscal Policy

CHAPTER 10 Fiscal Policy

Exhibit 1 Fiscal Policy in Keynesian Theory: Ridding the Economy of Recessionary and Inflationary Gaps Arnold Economics, 6 e / Ch. 10 Fiscal Policy © 2004 South-Western, a division of Thomson Learning™ 118

Exhibit 2 Zero (No), Incomplete, and Complete Crowding Out Arnold Economics, 6 e / Ch. 10 Fiscal Policy © 2004 South-Western, a division of Thomson Learning™ 119

Exhibit 3 Expansionary Fiscal Policy (Government Spending Increases), Crowding Out, and Changes in Real GDP and the Unemployment Rate Arnold Economics, 6 e / Ch. 10 Fiscal Policy © 2004 South-Western, a division of Thomson Learning™ 120

Exhibit 4 The New Classical View of Expansionary Fiscal Policy Arnold Economics, 6 e / Ch. 10 Fiscal Policy © 2004 South-Western, a division of Thomson Learning™ 121

Exhibit 5 Fiscal Policy May Destabilize the Economy Arnold Economics, 6 e / Ch. 10 Fiscal Policy © 2004 South-Western, a division of Thomson Learning™ 122

Exhibit 6 Will Fiscal Policy Be Effective? Arnold Economics, 6 e / Ch. 10 Fiscal Policy © 2004 South-Western, a division of Thomson Learning™ 123

Exhibit 7 The Predicted Effect of a Permanent Marginal Tax Rate Cut on Aggregate Supply Arnold Economics, 6 e / Ch. 10 Fiscal Policy © 2004 South-Western, a division of Thomson Learning™ 124

Exhibit 8 The Laffer Curve Arnold Economics, 6 e / Ch. 10 Fiscal Policy © 2004 South-Western, a division of Thomson Learning™ 125

Exhibit 9 Tax Rates, the Tax Base, and Tax Revenues Arnold Economics, 6 e / Ch. 10 Fiscal Policy © 2004 South-Western, a division of Thomson Learning™ 126

Exhibit 10 Macroeconomists’ Views on Two Issues: How the Economy Works and the Effectiveness of Fiscal Policy Arnold Economics, 6 e / Ch. 10 Fiscal Policy © 2004 South-Western, a division of Thomson Learning™ 127