About This Chapter
Who's it for?
Anyone who needs help learning or mastering college macroeconomics material will benefit from taking this course. There is no faster or easier way to learn college macroeconomics. Among those who would benefit are:
- Students who have fallen behind in understanding fiscal policy or working with fiscal policy tools
- Students who struggle with learning disabilities or learning differences, including autism and ADHD
- Students who prefer multiple ways of learning economics (visual or auditory)
- Students who have missed class time and need to catch up
- Students who need an efficient way to learn about fiscal and monetary policies
- Students who struggle to understand their teachers
- Students who attend schools without extra economics learning resources
How it works:
- Find videos in our course that cover what you need to learn or review.
- Press play and watch the video lesson.
- Refer to the video transcripts to reinforce your learning.
- Test your understanding of each lesson with short quizzes.
- Verify you're ready by completing the Fiscal and Monetary Policies chapter exam.
Why it works:
- Study Efficiently: Skip what you know, review what you don't.
- Retain What You Learn: Engaging animations and real-life examples make topics easy to grasp.
- Be Ready on Test Day: Use the Fiscal and Monetary Policies chapter exam to be prepared.
- Get Extra Support: Ask our subject-matter experts any fiscal and monetary policies question. They're here to help!
- Study With Flexibility: Watch videos on any web-ready device.
Students will review:
This chapter helps students review the concepts in a Fiscal and Monetary Policies unit of a standard college-level principles of macroeconomics course. Topics covered include:
- Expansionary fiscal policy and aggregate demand
- Fiscal policy and the effect on unemployment
- Automatic stabilizers in economics
- Supply-side economics
- Contractionary and expansionary gap
1. Fiscal Policy: The Keynesian Revolution
In this lesson, you'll learn how the government uses stabilization policy to smooth out the ups and downs of the business cycles. In stark opposition to the Classical approach, this Keynesian approach favors taking immediate action to stabilize a troubled economy.
2. Fiscal Policy Tools: Government Spending and Taxes
Discover the three main tools the government uses to address recessionary and inflationary economies - what economists call fiscal policy. Find out how these tools are used to help the economy in different situations.
3. Expansionary Fiscal Policy and Aggregate Demand
In the 21st century, the realities of a recessionary economy are more vivid than many of us would probably like. In this lesson, you'll learn how the government uses expansionary policy to offset recessionary gaps using real-world examples.
4. Contractionary Fiscal Policy and Aggregate Demand
This lesson examines how fiscal authorities use contractionary fiscal policy to slow down the economy and defeat the enemy called inflation. Find out what fiscal tools the federal authorities can use to contract the economy.
5. Fiscal Policy and the Effects on Unemployment
Review what fiscal policy is and how the two key components of fiscal policy can be used to influence unemployment. Find out when and how fiscal policy can be used and why it is so important.
6. Understanding the Progressive Tax Code
In this lesson, learn what a progressive tax code is, how to recognize it, and what the alternatives are. Then, learn the differences between the three tax codes: progressive, regressive and proportional. Finally, learn how sales tax would impact progressivity.
7. Automatic Stabilizers in Economics: Definition & Examples
Watch this lesson to learn about the features that are built into the tax code and the government's budget that help offset declines in aggregate demand during recessions. Referred to as automatic stabilizers, they also address the needs of individuals facing hard times.
8. Expansionary Monetary Policy: Helping the Economy Grow
In this lesson, you'll learn how the central bank helps the economy grow during recessions by increasing the size of the money supply. An overview of the three tools of monetary policy are included as well as the reasons why monetary policy leads to higher economic output.
9. Contractionary Monetary Policy: Slowing the Economy Down
In this lesson, you'll find out more about the central bank's efforts to deal with an overheating economy, what economists call 'contractionary monetary policy.'
10. The Importance of Timing in Fiscal and Monetary Policy Decisions
In this lesson, discover four different types of policy lags that occur when fiscal and monetary authorities take action in attempt to influence economic output. Find out which policy has less of a time lag.
11. Supply-Side Economics in Fiscal and Monetary Policy
This lesson explains what supply-side economics is, where it started, and how economists illustrate it. It provides a basic overview of the still-controversial theory that was popularized by President Ronald Reagan during the 1980s.
12. Short-Term GDP and National Debt: Keynes' Theory
Discover the tension fiscal authorities face between the two equally rewarding goals of reducing the national debt and maintaining a growing economy in the short term. This lesson explains the tension from the Keynesian point of view.
13. What is a Contractionary Gap? - Identifying an Economy That is Below Potential
In this lesson, you'll discover what a contractionary gap is with a real world example. In addition, you'll learn how economists illustrate it, so you can easily recognize it.
14. Calculating the Size of a Contractionary Gap
Sometimes the economy's actual production is below its potential, and in this lesson, you'll learn how to calculate the gap between the two, something economists call 'a contractionary gap.'
15. What is an Expansionary Gap? - Identifying an Economy That is Above Potential
In this lesson, you'll find out what an expansionary gap is, how economists illustrate it, and how to easily identify an economy that is growing above its long-run potential. In addition, you'll discover the unintended consequence that comes with expansionary gaps.
16. Calculating the Size of an Expansionary Gap
This lesson will teach you how to estimate the size of an expansionary gap by calculating the difference between actual economic output and potential economic output. The task of knowing the size of an expansionary gap is critical for economists and government leaders who want to attempt to eliminate it so they can help smooth out the business cycle.
17. Managing the Economy with Fiscal and Monetary Policies
Learn what fiscal and monetary policy are and how they are used to manage the economy. Find out the goals of these policies and some of the tools that each use to help you find a job and influence the amount of money in your pocket.
18. The Federal Reserve Act of 1913: Definition & Overview
The Federal Reserve Act of 1913 was one of the most important Congressional Acts of the 20th Century. In this lesson, you'll learn about the act and the central banking system it created. A short quiz follows.
Earning College Credit
Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.
To learn more, visit our Earning Credit Page
Transferring credit to the school of your choice
Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.
Other chapters within the Introduction to Macroeconomics: Help and Review course
- The Production Possibilities Curve: Help & Review
- Comparative Advantage, Specialization and Exchange: Help and Review
- Demand, Supply and Market Equilibrium: Help and Review
- Measuring the Economy: Help and Review
- Inflation Measurement and Adjustment: Help and Review
- Understanding Unemployment: Help and Review
- Aggregate Demand and Supply: Help and Review
- Macroeconomic Equilibrium: Help and Review
- Inflation and Unemployment: Help and Review
- Economic Growth and Productivity: Help and Review
- Money, Banking, and Financial Markets: Help and Review
- Central Bank and the Money Supply: Help and Review
- Foreign Exchange and the Balance of Payments: Help and Review
- Inflows, Outflows, and Restrictions: Help and Review
- Government & the Economy: Help and Review
- The U.S. Economic System