PRS_macro_ch27.pptVIP

Fiscal Policy A Boon for HR Block After studying this chapter, you should be able to: Define fiscal policy. Explain how fiscal policy affects aggregate demand and how the government can use fiscal policy to stabilize the economy. Explain how the multiplier process works with respect to fiscal policy. Discuss the difficulties that can arise in implementing fiscal policy. Explain how the federal budget can serve as an automatic stabilizer. Discuss the long-run effects of fiscal policy. Fiscal Policy Fiscal Policy Fiscal Policy Fiscal Policy The Future of Social Security and Medicare Fiscal Policy Using Fiscal Policy to Influence Aggregate Demand Using Fiscal Policy to Influence Aggregate Demand Using Fiscal Policy to Influence Aggregate Demand The Government Purchases and Tax Multipliers The Government Purchases and Tax Multipliers The Government Purchases and Tax Multipliers The Government Purchases and Tax Multipliers The Government Purchases and Tax Multipliers Fiscal Policy Multipliers The Limits of Using Fiscal Policy to Stabilize the Economy The Limits of Using Fiscal Policy to Stabilize the Economy The Limits of Using Fiscal Policy to Stabilize the Economy The Limits of Using Fiscal Policy to Stabilize the Economy Limits to Fiscal Policy: Japan in the Late 1990s Deficits, Surpluses, and Federal Government Debt Deficits, Surpluses, and Federal Government Debt Deficits, Surpluses, and Federal Government Debt Did Fiscal Policy Fail During the Great Depression? Deficits, Surpluses, and Federal Government Debt The Effect of Economic Fluctuations on the Budget Deficit Deficits, Surpluses, and Federal Government Debt The Effects of Fiscal Policy in the Long Run Should the United States Adopt the “Flat Tax”? The Effects of Fiscal Policy in the Long Run The Not-So-Incredible Shrinking Deficit Automatic stabilizers Budget deficit Budget surplus Crowding out Cyclically adjusted budget deficit or surplus Fiscal policy Multiplier effect Tax wedge Getting th