fiscal policy

fiscal policy - Isabelle DiStefano Fiscal Policy Economics...

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Isabelle DiStefano Fiscal Policy Economics 2302
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Monetary Policy is a major part of our government’s macroeconomic policy. In turn, fiscal policy is a major part of the monetary policy. Fiscal policy can be thought of as what the American government spends our budget on, and how much of the budget the government spends. A government’s budget determines how much and where money will go to. When the total taxes collected are more than the expenditure, a government is said to have a budget surplus. While on the other hand, when expenditure exceeds the amount collected from people from taxes, a government is said to have a budget deficit. In recent years, our American government has had a government deficit. When the economy is not doing so well, or rather, in an economic downturn, it is said to be in a recession. This is when actual output is much lower, or growing at a slower rate than the potential output. During these times, the government enacts certain policies to create an upturn in the economy called stabilization policies. These help to balance
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fiscal policy - Isabelle DiStefano Fiscal Policy Economics...

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