What Are the Components of Fiscal Policy? Explain How Fiscal

question 105

Essay

What are the components of fiscal policy? Explain how fiscal policy affects aggregate demand.

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Definitions:

Consideration

Something of value that is exchanged between parties in a contract, which is necessary for the agreement to be legally binding.

Gift

Something given voluntarily without payment in return, often as a symbol of affection or goodwill.

Contract

An agreement between multiple parties that is recognized and can be enforced by the legal system.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to a second party if the latter has reasonably relied on that promise to their detriment.