Question

Describe at least four elements that contributed to the 2012 “Fiscal Cliff” and explain briefly how it was resolved.

Answer 1

the fiscal cliff was started in december 31,2012

the fiscal cliff refers to a combination of expiring tax cuts,the actual idea behind the fiscal cliff.the idea behind the fiscal cliff was that if the federal governmanet allowed these two events to proceed as planned,the would have a determinial effect on an already shaky economy.

there are certain steps the goverment had taken to resolve the issue.

in jan 2013 congress passed the american tax relief act of 2012 (ATRA) which was made into law quickly.

under this act bush-era tax cuts were reinstated for middile and lower income familirs and remained expired for high income tax payers.

the ATRA also delayed the plan to cross the boards spending cuts for 2 months.

the ATRA was the act which helped to resolve the problem by the governmant

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