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How are expansionary and contrctionary policy similar

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How are expansionary and contrctionary policy similar

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Expansionary policies and contractionary policies are similar in a way that both policies are discretionary in nature and come with the lag effects. Both of these policies affect the consumption spending and demand by manipulating the disposable income available to the households, if these policies are fiscal policies. If these policies are monetary, then it is affecting money supply supply and changing employment and growth. Further, expansionary and contractionary policies, both work to achieve potential level of output and target the same level of inflation rate and or interest rate if it is monetary policy.

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