Implementing Fiscal Policy

Annotations:

• Economic problem (recession, etc) must be recognized

1. 2) Legislative
   1. 3) Implementation
      1. 4) Effectiveness
         1. 5) Evaluation
            1. Did it work?
         2. Time needed
      2. Bureaucracies must implement
   2. Congress proposes & Passes a plan

      Annotations:

      • As you know, this takes FOREVER

1. Welfare & Transfer programs
   1. More people apply
      1. More $
         1. More spending
            1. Increase AD curve
2. Consumption Smoothing
   1. People dissave

      Annotations:

      • Credit Cards help with consumption smoothing
      1. Increase AD