Ch 22: Georgia Milestones: Expansionary & Contractionary Policies

About This Chapter

Enhance your preparation for the Georgia Milestones- Economics/Business/Free Enterprise EOC exam by fully understanding expansionary and contractionary policies. Review engaging lessons on the contractionary gap and how it is calculated.

Georgia Milestones: Expansionary & Contractionary Policies - Chapter Summary

If you haven't reviewed information on expansionary and contractionary policies in your preparation for the Georgia Milestones exam, you have come to the right place. This chapter covers everything you need to know in order to pass this portion of the exam. The short video lessons will prepare you to answer questions in regards to:

  • Expansionary fiscal policy and demand
  • How contractionary fiscal policy affects demand
  • Expansionary monetary policy
  • Contractionary monetary policy
  • Contractionary gap
  • How to calculate the contractionary gap
  • Expansionary gap
  • Ways to calculate the expansionary gap

The subject of expansionary and contractionary policies can be a difficult one to grasp. Our instructors teach these lessons in a way that is not only informative, but also easy to understand. If you find yourself struggling to retain the material or you have any questions, our instructors are available to address any of your concerns, making you more confident on test day.

8 Lessons in Chapter 22: Georgia Milestones: Expansionary & Contractionary Policies
Test your knowledge with a 30-question chapter practice test
Expansionary Fiscal Policy and Aggregate Demand

1. 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.

Contractionary Fiscal Policy and Aggregate Demand

2. 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.

Expansionary Monetary Policy: Helping the Economy Grow

3. 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.

Contractionary Monetary Policy: Slowing the Economy Down

4. 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.'

What is a Contractionary Gap? - Identifying an Economy That is Below Potential

5. 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.

Calculating the Size of a Contractionary Gap

6. 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.'

What is an Expansionary Gap? - Identifying an Economy That is Above Potential

7. 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.

Calculating the Size of an Expansionary Gap

8. 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.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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