Fiscal Policy(1)

Fiscal Policy(1) - Fiscal Policy Background: Employment Act...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Fiscal Policy Background: Employment Act of 1946 : Congressional/legislative mandate for stabilization policy proclaiming the role of government in promoting maximum purchasing power (CPI) employment (U), and production (RGDP). Therefore our National Goals are: 1. 2. 3. Implications from establishing these goals: 1. 2. Government polices for influencing the macroeconomy: 1. Fiscal Policy 2. Supply-side: important since 1980 3. Monetary policy 4. Incomes Policies: direct attempts to control process and wages through regulation Fiscal Policy: Definition: Keynesian Assumptions: G doesn’t depress or stimulate private spending (crowding out is a myth) Fiscal Policy affects only AD NOT AS There will always be a trade-off between U and inflation (Phillips Curve) If people are pessimistic then C falls as does AD; optimistic = C up and AD up Believes that international trade has little effect Types of Fiscal Policy 1. Automatic : built in fiscal policy that happens AUTOMATICALLY as the economy changes
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/18/2011 for the course ECON 101 taught by Professor Mcdounough during the Spring '11 term at DeVry Westminster.

Page1 / 2

Fiscal Policy(1) - Fiscal Policy Background: Employment Act...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online