"They reduce disposable income" explains how contractionary policies can hamper economic growth
<h3>Further explanation
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Disposable income is the amount of money that households have,available for spending and saving after income taxes accounted.
Expansionary fiscal policy is an increase in government expenditures, also a decrease in taxes that causes the government's budget deficit to increase or its budget surplus to decrease. In short, expansionary fiscal policy boosts economic growth by lowering interest rates.
Whereas contractionary fiscal policy is defined as a decrease in government expenditures, also an increase in taxes that causes the government's budget deficit to decrease or its budget surplus to increase. Contractionary money policy is used to combat inflation. In short, contractionary fiscal policy hamper economic growth by increasing interest rates.
Contractionary policy increases the cost of borrowing. It can decreases GDP and dampens inflation, but also leads to reduced disposable income. Another negative side effect is it makes an increase in the unemployment rate. Disposable income itself is the amount of money that households have, available for spending and saving after income taxes accounted.
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<h3>Answer details</h3>
Grade: 9
Subject: social studies
Chapter: hamper economic growth
Keywords: hamper economic growth
One of the last openly segregationist politicians in Georgia was Lester Maddox.
Answer: The correct answer is: Focus on her next level of needs.
Explanation: According to Maslow's theory of the hierarchy of needs, human beings have their needs organized in a pyramid.
The needs that are at the bottom of the pyramid must be satisfied for the individual to start satisfying the needs that are higher up. The need for security is lower in the hierarchy than the social needs.
In this particular case<u>, Erin already satisfied her needs of security because she already secured a good-paying job, a decent apartment, and an economical car, she also feels safe in her home, therefore, she now can move on to attend the needs that follow up in the hierarchy, which are social needs.</u>
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Prices are determined in a free market economy through the interactions of supply and demand in the Marketplace <span>where demand is the quantity of a product that buyers are willing to purchase according to a given price and supply is the amount of a product that sellers can vendor to customers at a given price.</span>
