fiscal policy

fiscal policy

1. what are the goals and limits of fiscal policy?

   • to control the economy and lessen the effects of troughs and peaks

2. economic ideas

   • classical: economy will control itself
   • demand: economy driven by demand for goods
   • supply: economy is drive by the supply of goods
   • keynesian: government should be active in the economy

3. effects of budget deficits and national debt

   • budget deficits cause the national debt to rise

4. governments use of spending and taxing to control the economy

5. monetary policy

   • federal reserve
     • organization of fed reserve
       • 12 district banks
         • national banks are members
         • banks pay $ to receive stock
         • controlled by board of geovernors
     • controls money in the economy
     • control
       • change tax values
       • make sure banks are following guidelines
   • stability
     • makes economies troughs and peaks less extreme