Students will need to read: Fiscal Policy: Taking and Giving Away
Answer the questions below
What are the aims of government fiscal policies?
What influences on production, employment and price does the government have on fiscal policies?
How do taxation, borrowing, and spending account for fiscal policies?
What are some examples of government fiscal policies being good for the United States?
What are some bad examples of when government fiscal policies have hurt the United States?
1. The aims of government fiscal policies are to promote strong and sustainable growth and reduce poverty.
ReplyDelete2. Some influences that the government has on fiscal policy is influencing the way resources are used in the economy which is through GDP. It is said that on the left side of GDP the government influences the value on production in the economy and on the right side it is influencing the spending and demand of certain things.
3. Taxation, borrowing, and spending all account for fiscal policy because these all determine how the government attempts to stabilize the economy big or small. Like for example, the government, in order to help balance the economy, may need to cut taxes and doing that will expand spending and most likely decrease borrowing depending on the money people are spending and saving.
4. Some examples of government fiscal policies being good for the United States is when there was a global crisis in 2007 which its roots were in the U.S. mortgage market. So what the government did is it used fiscal policies to attempt to respond to this crisis by boosting activity through stabilizers and fiscal stimulus which are tax cuts or also discretionary spending.
5. Some bad examples of when government fiscal policies have hurt the United States is when they create fiscal deficits and when they create rising interest rates which can increase inflation in the economy which is mainly from expansionary fiscal policies.