Econ Unit 5 Individual Project

Econ Unit 5 Individual Project - Unit 5 Individual Project...

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Unit 5 Individual Project Unit 5 Individual Project Presented in Partial Fulfillment Of the Requirements for the Class BUS 305 – Economics in a Global Environment by Lorraine M. Huff AIU Online December 13, 2009 Discretionary fiscal policy is defined as government economic policy that is not automatic or built into the system. The Federal Reserve Board's implementation of its powers to add to or subtract from the money supply and to set the discount rate are examples of discretionary policies. When the government decides on the goods and services it purchases, the transfer payments it distributes, or the taxes it collects, it is engaging in fiscal policy. When time lags are involved, they affect the efforts of Congress and the President. Government changes, in tax collection for example, affect the economy. Discretionary fiscal policy is made more difficult due to time lags in recognizing the need for changed fiscal policy and the lags that occur with enacting the changed fiscal policy. Implementing the modified fiscal policy usually requires legislative action, which takes a long time to implement. There is a concern that fiscal policy changes may be ill-timed. Ideally, fiscal policy will be used to increase aggregate demand during recessions and to restrain aggregate
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This note was uploaded on 01/18/2012 for the course ECON 421 taught by Professor Kimberlybennett during the Spring '10 term at American InterContinental University.

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Econ Unit 5 Individual Project - Unit 5 Individual Project...

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