Political Science 2211E Lecture Notes - Lecture 11: Fiscal Policy, Environmental Health, W. M. Keck Observatory
10 Apr 2018
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A governments level of spending and their tax rates. A tool that governments use to increase aggregate demand. These are the tools the government use to calculate taxes. De ationary budgetary policy: lower government spending and higher taxes. If the government adopts this approach they will have low spending and high government taxes: it is trying to slow down the economy. There is less money in the economy as there is less money circulating, and we as citizens have less money to spend in the economy. Re ationary budgetary policy: higher government spending and lower taxes. Objective is to have the opposite outcome; when governments want to stimulate the economy they will adopt this approach. Adopt this policy when the economy is struggling and you have to go into a de cit. Monday, november 20, 2017: when a government can"t borrow more money, then they cannot adopt this policy and they cannot help the economy.
