Send the link below via email or IMCopy
Present to your audienceStart remote presentation
- Invited audience members will follow you as you navigate and present
- People invited to a presentation do not need a Prezi account
- This link expires 10 minutes after you close the presentation
- A maximum of 30 users can follow your presentation
- Learn more about this feature in our knowledge base article
Do you really want to delete this prezi?
Neither you, nor the coeditors you shared it with will be able to recover it again.
Make your likes visible on Facebook?
You can change this under Settings & Account at any time.
Fiscal Policy & Criticism of Fiscal & Monetary Policy
Transcript of Fiscal Policy & Criticism of Fiscal & Monetary Policy
How is it Effective? The Negative Effects of Fiscal Policy Expansionary & Contractionary Fiscal Policy Expansionary - decreases in taxes, increases in spending
- Result: Budget deficit increases/ budget surpluses decreases
Contractionary - spending decreases and tax revenue increases
- Result: Budget Deficit increases /budget surplus decreases What is Fiscal Policy? Fiscal Policy &
Criticism of Fiscal & Monetary Policy The View of the "Keynesian"
The Effects of Expansionary Fiscal Policy
"Keynes" believed in conducting an "Expansionary Fiscal."
- believed it could fight recession
To eliminate recession, must run a budget deficit .
- Causes Aggregate Demand to shift
Expansionary provides a way out of recession. Secondary & Contractionary Effects
Keynesians believe "Contractionary can fight inflation.
Fiscal Policy Affects credit market conditions
- government reduces spending's/ borrowings, funds are available
-Aggregate Demand (demand for goods) decreases.
Rise in aggregate demand /lack of borrowing/ spending Government borrows funds , funds available decreases.
- Result: interest increases/aggregate demand decreases.
Expansionary : decreases net exports, affects output/ income. By: Tatiana Rice, Ria Baldoz,
David Godoy & Jhaniel Resma The Fiscal Policy How the Government influences the economy
Legislative and Executive Branch controls Fiscal
Two instrument: Spending & Taxation
- government collects taxes to finance services
decreases taxes >more money Budget Deficit & Surpluses
What are they? Budget Deficit-When government spending's exceeds taxation
- Government spending - Tax revenue
Budget Surplus- government spending's less than taxation
- Government spending's - Tax revenue
Balanced Budget- spending's equal to tax revenue Criticism of Fiscal Policy
(Positive Effects) Criticism of Monetary Policy
How it is Effective or Negative Fiscal Policy Criticism of Monetary Policy flow of cash restricted
→ -decline in spending
→ -failure to sell products
→ -factories close
→ -people laid off
adverse feedback loop
2007 Fiscal Policy Debate The End