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Colleen
Fiscal drag happens when the government's net fiscal position (spending minus taxation) fails to cover the net savings desires of the private economy, also called the private economy's spending gap (earnings minus spending and private investment). The resulting lack of aggregate demand leads to deflationary pressure, or drag, on the economy, essentially due to lack of state spending or to excess taxation.
http://en.wikipedia.org/wiki/Fiscal_drag
http://en.wikipedia.org/wiki/Fiscal_drag
| 14 years ago. Rating: 1 | |
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