m2 #5
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a. Several military bases around the country, which together employ tens of thousands of people, are closed.
a.This is contractionary fiscal policy because it is a reduction in government purchases of goods and services.
b. The number of weeks an unemployed person is eligible for unemployment benefits is increased.
b. This is an expansionary fiscal policy because it is an increase in government transfers that will increase disposable income.
c. The federal tax on gasoline is increased.
c. This is a contractionary fiscal policy because it is an increase in taxes that will reduce disposable income.
