Introduction to Fiscal Policy – Expansionary vs. Contractionary Policies

This video lesson will introduce the use of fiscal policies by a government aimed at expanding or contracting the level of economic activity in the nation. Changing the amount of government spanding and taxation can influence several macroeconomic variables, such as employment, price levels and the level of output.

When should a government alter the level of taxes and spending it engages in? This lesson will introduce two circumstances under which fiscal policy may be used to promote the achievement of various macroeconomics objectives.

 

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