Venezuela's Expanisonary Fiscal Policy
The Venezuelan government is using extra income they have from high petroleum earnings and spending it on national development. In total, the government is spending 12.6 billion bolivars, which is $2.9 billion in the US. They are spending the most on energy and petroleum with the amount of Bs 1.5 billion ($US 955 million). The government is also spending Bs 1.6 billion ($US 372 million) on agriculture and land, Bs 1.5 billion ($US 348 million) on electricity, Bs 1.5 billion ($US 348 million) on justice and interior affairs, Bs 361 million ($US 83 million) on sports, Bs 332 million ($US 77.2 million) on roads, Bs 150 million ($US 35 million) on science and technology, and Bs 24 million ($US 5.6 million) on transport and communication.
Effect from the Policy
Since this fiscal policy is expansionary, the results of this policy will be an increase in real GDP and low unemployemnt. The government is trying to have their economy grow.
Aggregate demand and aggregate supply chart
This fiscal policy will increase both the aggregate supply and aggregate demand. The aggregate demand curve will increase from AD1 to AD2. The aggregate supply will increase from AS1 to AS2.
The Venezuelan government is using extra income they have from high petroleum earnings and spending it on national development. In total, the government is spending 12.6 billion bolivars, which is $2.9 billion in the US. They are spending the most on energy and petroleum with the amount of Bs 1.5 billion ($US 955 million). The government is also spending Bs 1.6 billion ($US 372 million) on agriculture and land, Bs 1.5 billion ($US 348 million) on electricity, Bs 1.5 billion ($US 348 million) on justice and interior affairs, Bs 361 million ($US 83 million) on sports, Bs 332 million ($US 77.2 million) on roads, Bs 150 million ($US 35 million) on science and technology, and Bs 24 million ($US 5.6 million) on transport and communication.
Effect from the Policy
Since this fiscal policy is expansionary, the results of this policy will be an increase in real GDP and low unemployemnt. The government is trying to have their economy grow.
Aggregate demand and aggregate supply chart
This fiscal policy will increase both the aggregate supply and aggregate demand. The aggregate demand curve will increase from AD1 to AD2. The aggregate supply will increase from AS1 to AS2.