Fiscal policy aims to stabilize economic growth and smooth the business cycle using the federal budget. It can use expansionary or contractionary fiscal policy to respectively increase or decrease aggregate demand by increasing or decreasing government spending and taxes. Expansionary policy is used to stimulate the economy during recessions, while contractionary policy is used during booms. Fiscal policy implementation involves both automatic stabilizers and discretionary changes to policy and faces limitations such as political conflicts, time lags, and potential budget deficits.
Notes for Principles of Macroeconomics (ECON 10020 or ECON 20020) at the University of Notre Dame. Topics include the role of financial institutions and financial markets in capitalist economies, government management of the business cycle, and current monetary policy in the United States. Etc.
KEY TAKE AWAYS
Objectives
Definition
Basic macroeconomic concepts
Types of Macro economic Policy
Monetary Policy
Fiscal Policy
Comparison between Monetary and Fiscal Policy
Features of Macroeconomic Policy
Effect of Macro economic Policy
Importance of Macroeconomic Policy
Weakness of Macroeconomics Policy
Conclusion
GDP, Inflation and unemployment for assessing Economic Health.MaherMubeen
Why do economists focus on GDP, Inflation, and unemployment for assessing the entire health of the economy? To know how much the countries are economically strong.
Notes for Principles of Macroeconomics (ECON 10020 or ECON 20020) at the University of Notre Dame. Topics include the role of financial institutions and financial markets in capitalist economies, government management of the business cycle, and current monetary policy in the United States. Etc.
KEY TAKE AWAYS
Objectives
Definition
Basic macroeconomic concepts
Types of Macro economic Policy
Monetary Policy
Fiscal Policy
Comparison between Monetary and Fiscal Policy
Features of Macroeconomic Policy
Effect of Macro economic Policy
Importance of Macroeconomic Policy
Weakness of Macroeconomics Policy
Conclusion
GDP, Inflation and unemployment for assessing Economic Health.MaherMubeen
Why do economists focus on GDP, Inflation, and unemployment for assessing the entire health of the economy? To know how much the countries are economically strong.
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
We all have good and bad thoughts from time to time and situation to situation. We are bombarded daily with spiraling thoughts(both negative and positive) creating all-consuming feel , making us difficult to manage with associated suffering. Good thoughts are like our Mob Signal (Positive thought) amidst noise(negative thought) in the atmosphere. Negative thoughts like noise outweigh positive thoughts. These thoughts often create unwanted confusion, trouble, stress and frustration in our mind as well as chaos in our physical world. Negative thoughts are also known as “distorted thinking”.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdfTechSoup
In this webinar you will learn how your organization can access TechSoup's wide variety of product discount and donation programs. From hardware to software, we'll give you a tour of the tools available to help your nonprofit with productivity, collaboration, financial management, donor tracking, security, and more.
The Art Pastor's Guide to Sabbath | Steve ThomasonSteve Thomason
What is the purpose of the Sabbath Law in the Torah. It is interesting to compare how the context of the law shifts from Exodus to Deuteronomy. Who gets to rest, and why?
This is a presentation by Dada Robert in a Your Skill Boost masterclass organised by the Excellence Foundation for South Sudan (EFSS) on Saturday, the 25th and Sunday, the 26th of May 2024.
He discussed the concept of quality improvement, emphasizing its applicability to various aspects of life, including personal, project, and program improvements. He defined quality as doing the right thing at the right time in the right way to achieve the best possible results and discussed the concept of the "gap" between what we know and what we do, and how this gap represents the areas we need to improve. He explained the scientific approach to quality improvement, which involves systematic performance analysis, testing and learning, and implementing change ideas. He also highlighted the importance of client focus and a team approach to quality improvement.
2. Introduction to Fiscal Policy
3.) Fiscal Budget and Problems
1.) Goals and Types of Fiscal Policy
2.) How Fiscal Policy is Done
4.) Fiscal Policy Limitations
3. - is the use of the federal budget to
sustain economic growth and smooth
连出 the business cycle.
Fiscal Policy
AD = C + I + G + (X – M)
- is the use of taxes, government
transfers, or government
purchases of goods and services
to shift the AD curve.
Reworded definition: 换句话说
1.) Goals and Types of Fiscal Policy
4. Time
Long Run
Short Run
In the short run things go up and down and can
be quite volatile挥发物
Business Cycle
Econ
Growth
- is the use of the federal budget to
sustain economic growth and smooth
the business cycle.
Fiscal Policy
- Basically,
fiscal policy
aims to
stabilize
economic
growth,
avoiding a
boom and
bust economic
cycle.
5. Time
Long Run
Short Run
In the short run things go up and down and can
be quite volatile挥发物
Business Cycle
Econ
Growth
- is the use of the federal budget to
sustain economic growth and smooth
the business cycle.
Fiscal Policy
- Basically,
fiscal policy
aims to
stabilize
economic
growth,
avoiding a
boom and
bust economic
cycle.
6. - An increase in government spending
or decrease in taxes to increase AD.
Expansionary
Fiscal Policy
AD = C + I + G + (X – M)
Inflationary
Fiscal Policy
or
Government spending
Taxes
***Ceteris Paribus
Definition with arrows: 换句话说
Shifts AD rightor / and
1.) Goals and Types of Fiscal Policy
7. AD = C + I + G + (X – M)
Government spending
Price
level
GDP
AD
SRAS
PE
LRAS
YN Y1
P1
AD1
1.) Goals and Types of Fiscal Policy
- Government spends
more in the economy
and makes jobs, people
have more money and
increase consumption.
8. AD = C + I + G + (X – M)
Taxes
Price
level
GDP
AD
SRAS
PE
LRAS
YN Y1
P1
AD1
1.) Goals and Types of Fiscal Policy
- Lower taxes means
people have more
money to use for
consumption and also
businesses have more
money to increase
investment spending.
9. AD = C + I + G + (X – M)
or
Government spending
Taxes
***Ceteris Paribus
Definition with arrows: 换句话说
Shifts AD rightor / and
1.) Goals and Types of Fiscal Policy
Contractionary
Fiscal Policy
Deflationary
Fiscal Policy
A decrease in government spending
or increase in taxes to decrease AD.
10. Time
Long Run
Short Run
Econ
Growth
- is the use of the federal budget to
sustain economic growth and smooth
the business cycle.
Fiscal Policy
At this point use
Contractionary Fiscal
Policy
At this point
use
Expansionary
Fiscal Policy
11. Time
Long Run
Short Run
Business Cycle
Econ
Growth
- is the use of the federal budget to
sustain economic growth and smooth
the business cycle.
Fiscal Policy
- Basically,
fiscal policy
aims to
stabilize
economic
growth,
avoiding a
boom and
bust economic
cycle.
12. Introduction to Fiscal Policy
3.) Fiscal Budget and Problems
1.) Goals and Types of Fiscal Policy
2.) How Fiscal Policy is Done
4.) Fiscal Policy Limitations
13. 2.) How Fiscal Policy is Done
Automatic
Stabilizers
Discretionary
Fiscal Policy
Two ways the policy is implemented. Either
automatically without having to change policy or
by the direct change by lawmakers in response to
economic changes.
14. - based on the subjective judgment of
policymakers in the moment to an
attempt to directly affect the economy.
Discretionary
Fiscal Policy
在当下，政策制定者决定
Ways to accomplish it:
- New Laws or Legislation 法规
2.) How Fiscal Policy is Done
- New jobs programs / public works
- Issue new Bonds
15. Ways to accomplish it:
2.) How Fiscal Policy is Done
- A set of laws or legislation 法规 that occurs and
has an immediate response without any official or
government body having to take action.
Discretionary
Fiscal Policy
Automatic
Stabilizers
- Progressive Taxes - Direct taxes on households income
Poor RichAverage
pay
10%
pay
15%
pay
20%
As income and AD decrease
the progressive taxes with
“automatically” tax people less
and visa versa.
16. 16
Types of Taxes
Direct Taxes
-Taxes based on ownership.
-Paid directly to the
government by people.
-Example:
-Income taxes, property taxes.
Indirect Taxes
-Taxes paid on a market
transaction.
-Sellers usually pay to the
government.
-Example:
-sales taxes, VAT taxes.
17. Ways to accomplish it:
2.) How Fiscal Policy is Done
- A set of laws or legislation 法规 that occurs and
has an immediate response without any official or
government body having to take action.
Discretionary
Fiscal Policy
Automatic
Stabilizers
- Unemployment Benefits
As income and AD increase people won’t need
unemployment benefits so “automatically”
changes and visa versa.
18. Ways to accomplish it:
2.) How Fiscal Policy is Done
- A set of laws or legislation 法规 that occurs and
has an immediate response without any official or
government body having to take action.
Discretionary
Fiscal Policy
Automatic
Stabilizers
- Progressive Taxes
- Unemployment Benefits
- New laws with permeant
spending requirements
19. Introduction to Fiscal Policy
3.) Fiscal Budget and Problems
1.) Goals and Types of Fiscal Policy
2.) How Fiscal Policy is Done
4.) Fiscal Policy Limitations
20. - annual expenditures and tax receipts
of the government. 支出和税收
Fiscal Policy
Fiscal Budget
3.) Fiscal Budget and Problems
21. - annual expenditures and tax receipts
of the government. 支出和税收
Fiscal Policy
Fiscal Budget
3.) Fiscal Budget and Problems
- if expenditures exceeds tax receipts.Budget Deficit
支出 税收>
22. In the US and other countries,
it’s very common for
governments to have
constant deficits.
23. - annual expenditures and tax receipts
of the government. 支出和税收
Fiscal Policy
Fiscal Budget
3.) Fiscal Budget and Problems
- if expenditures exceeds tax receipts.Budget Deficit
支出 税收>
- if tax receipts exceeds expenditures.Budget Surplus
支出税收 >
27. Fiscal Budget
3.) Fiscal Budget and Problems
Budget Deficit vs. Budget Surplus
- The government borrows to finance a budget deficit and
repays its debt when it has a budget surplus.
政府借到预算赤字融资。政府偿还其债务时，有预算盈余。
- The amount of debt outstanding that
arises from past budget deficits is called
national debt.
旧债从过去的预算赤字总额被称为国家债务。
28. Introduction to Fiscal Policy
3.) Fiscal Budget and Problems
1.) Goals and Types of Fiscal Policy
2.) How Fiscal Policy is Done
4.) Fiscal Policy Limitations
3.1) Budget Deficit Problems
29. 3.1) Budget Deficit Problems
Crowding out: - Government spending and borrowing
that may fail to increase AD and hurts
排挤 private investment.
- When the government has to borrow, it
needs to borrow from the private sector. This
could be private individuals, pension funds or
investment trusts. It is argued that if the
private sector buy government securities this
will crowd out 排挤 private sector investment.
- Typically this deals with the increase of interest
rates due to attempting to sell more bonds to
finance debt.
30. 3.1) Budget Deficit Problems
Crowding out: - Government spending and borrowing
that may fail to increase AD and hurts
排挤 private investment.
- There is a limited supply of money that banks have to lend out.
If more investors want the money
= the money becomes more valuable
= interest rates increase
But then higher interest rates will lead to investors not wanting it
because now it’s more expensive.
So if governments want to borrow more of this scarce money it can
increase the interest rates and hurt some private investors.
31.
32. 3.1) Budget Deficit Problems
Long term debt: - Borrowed money has to be paid back
with interest over time meaning to
total costs will be higher.
- Future budgets will have less
discretionary spending ability due to
having to pay back old loans
Crowding out:
33. Introduction to Fiscal Policy
3.) Fiscal Budget and Problems
1.) Goals and Types of Fiscal Policy
2.) How Fiscal Policy is Done
4.) Fiscal Policy Limitations
37. Discretionary
Fiscal Policy
Limitations:
- Political conflicts
Automatic
Stabilizers
4.) Fiscal Policy Limitations
- By time policy is
enacted the economy
may have changed
- Time lags
Often it takes 1 or 2 years
for the changes to cycle
through the economy.
38.
39. This policy was enacted, but
unemployment got worse
before it stabilized.
40. Discretionary
Fiscal Policy
Limitations of both:
Automatic
Stabilizers
4.) Fiscal Policy Limitations
- Poor information
- Crowding out
- Cause deficit / debt problems
- Governments can be inefficient
- changes the
effectiveness
- Depends on the size
of the multiplier
42. - is the use of the federal budget to
sustain economic growth and smooth
the business cycle.
Fiscal Policy
AD = C + I + G + (X – M)
- Basically, fiscal policy aims to
stabilize economic growth,
avoiding a boom and bust
economic cycle.
1.) Goals and Types of Fiscal Policy
43. - An increase in government spending
or decrease in taxes to increase AD.
Expansionary
Fiscal Policy
AD = C + I + G + (X – M)
Inflationary
Fiscal Policy
or
Government spending
Taxes
***Ceteris Paribus
Definition with arrows: 换句话说
Shifts AD rightor / and
1.) Goals and Types of Fiscal Policy
44. AD = C + I + G + (X – M)
or
Government spending
Taxes
***Ceteris Paribus
Definition with arrows: 换句话说
Shifts AD rightor / and
1.) Goals and Types of Fiscal Policy
Contractionary
Fiscal Policy
Deflationary
Fiscal Policy
A decrease in government spending
or increase in taxes to decrease AD.
45. Time
Long Run
Short Run
Econ
Growth
- is the use of the federal budget to
sustain economic growth and smooth
the business cycle.
Fiscal Policy
Use Contractionary
Fiscal Policy
Use
Expansionary
Fiscal Policy
46. - based on the subjective judgment of
policymakers in the moment to an
attempt to directly affect the economy.
Discretionary
Fiscal Policy
在当下，政策制定者决定
Ways to accomplish it:
- New Laws or Legislation 法规
2.) How Fiscal Policy is Done
- New jobs programs / public works
- Issue new Bonds
47. Ways to accomplish it:
2.) How Fiscal Policy is Done
- A set of laws or legislation 法规 that occurs and
has an immediate response without any official or
government body having to take action.
Discretionary
Fiscal Policy
Automatic
Stabilizers
- Progressive Taxes
- Unemployment Benefits
- New laws with permeant spending requirements
48. - annual expenditures and tax receipts
of the government. 支出和税收
Fiscal Policy
Fiscal Budget
3.) Fiscal Budget and Problems
- if expenditures exceeds tax receipts.Budget Deficit
支出 税收>
- if tax receipts exceeds expenditures.Budget Surplus
支出税收 >
Balanced Budget - if tax receipts equals expenditures.
支出税收 =
50. Discretionary
Fiscal Policy
Limitations of both:
Automatic
Stabilizers
4.) Fiscal Policy Limitations
- Poor information
- Crowding out
- Cause deficit / debt problems
- Governments can be inefficient
- changes the
effectiveness
- Depends on the size
of the multiplier
51. The End – but don’t forget
the multiplier
Thanks
