About This Chapter
Fiscal Policy in Economics - Chapter Summary
Quickly and effectively strengthen your understanding of fiscal policy and economics using this engaging chapter. Get in-depth analyses of pork barrel spending, fiscal restraint, the GDP and much more by exploring fun lessons developed by our top instructors. When you're ready, check your comprehension of these topics by taking mini quizzes and a practice exam. If questions arise about topics covered in the lessons, feel free to submit them to our experts via the Dashboard. By the end of this chapter, you will be able to:
- Explain the impact fiscal policy and monetary policy have on the economy
- Define fiscal stimulus and fiscal restraint and discuss the multiplier effect
- Describe the impact government spending has on private investment
- Discuss why timing is important in monetary and fiscal policy decisions
- Share examples of pork barrel spending
- Compare and contrast public and private spending
1. How Fiscal Policy and Monetary Policy Affect the Economy
Governments often intervene in their economies in an attempt to maintain economic stability. In this lesson, you'll learn about fiscal and monetary policies, including what effect they can have on a national economy. A short quiz follows.
2. Fiscal Stimulus: Definition, Multiplier Effect & Price Levels
Fiscal stimulus is additional government spending or tax cuts designed to increase aggregate demand when the economy is not performing up to its potential. We will work through an example to show how fiscal stimulus works and how much is needed.
3. Government Spending, GDP, and Crowding Out Private Investment
When the government spends more than it earns, it has to borrow money, which has repercussions throughout the economy. In this lesson, learn how government spending can crowd out private investment in the market for loanable funds.
4. 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.
5. What is Pork Barrel Spending? - Definition & Examples
Pork barrel spending is the use of federal government money towards specific projects in order to help congressmen win re-election. We'll discuss why such spending occurs and look at some examples.
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Other chapters within the UExcel Introduction to Macroeconomics: Study Guide & Test Prep course
- Fundamental Concepts of Macroeconomics
- Government Failure in Macroeconomics
- Demand, Supply & the Economic Market
- Role of Government in Macroeconomics
- National Income Accounting Overview
- Unemployment & the Economy
- Basic Concepts of Inflation
- Measurements of Inflation
- The Business Cycle & Economics
- Aggregate Demand in Economics
- Budgets & National Debt
- Understanding Monetary Policy
- Fundamentals of Money
- Understanding the Federal Reserve System
- Supply-Side Policy & Policy Comparisons
- UExcel Introduction to Macroeconomics Flashcards