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Increase Taxes
Refers to a government's decision to raise the percentage of compulsory contributions on personal or corporate income, goods, services, or transactions, often aimed at financing government expenses.
Lower Interest Rates
A monetary policy strategy where central banks reduce the cost of borrowing money in an effort to stimulate economic growth.
Crowding Out
A situation in which increased government spending leads to a reduction in private sector spending and investment.
Contractionary Gap
A situation where an economy's real GDP is lower than its potential GDP, indicating underutilization of resources.
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