"They reduce disposable income" explains how contractionary policies can hamper economic growth
<h3>Further explanation
</h3>
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
The major amendment for 2020 from the constitution may be considered as the current issue on Citizenship and Reservation to the minority communities.
<u>Explanation:</u>
- The present ongoing issue is the citizenship act amendment which was passed in the Indian parliament is considered to be amended again because according to the Constitution of India an amendment can be made in the constitution but without disturbing the basic structure.
- The present bill passed in the parliament is opposed by several states as it violates article 14.
- The other issue is the Reservation which is provided for the sc/st community people once in the ten years. These reservations were given in early time to bring the community in an equal stage in the society but it has been followed as several years which makes the community enjoy luxury in comfort zone but there are still some peoples who are still in the backward.
- So if there is a certain amendment in the constitution it is also to be Considered.
"<span>When housing prices fall, consumers are more likely to </span>default<span> on their home loans, causing banks to lose money. Also, home equity dries up, meaning that consumers have fewer funds available for spending, saving, investing or paying down their debts. Sometimes, banks are even forced to shut down."</span><span>
Read more: How does a decline in housing prices affect the banking sector? | Investopedia http://www.investopedia.com/ask/answers/032315/how-does-decline-housing-prices-affect-banking-sector...
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