Advanced Placement Macroeconomics studying national and global economic systems.
Fiscal policy involves the use of government spending and taxation to influence the economy. It's how governments try to smooth out the ups and downs of the business cycle.
Increasing government spending or cutting taxes to stimulate economic growth, often used during recessions.
Decreasing spending or raising taxes to slow down an overheating economy and control inflation.
Built-in policies like unemployment insurance and progressive taxation automatically help stabilize the economy without additional government action.
Fiscal policy can be affected by political processes, time lags, and public debt concerns.
A government launches a major infrastructure project to create jobs during a recession.
Raising taxes to reduce a budget deficit and slow inflation.
Fiscal policy uses government spending and taxes to steer economic growth and stability.