Macroeconomics

Table of Contents

1. Topic pack - Macroeconomics - introduction
2. 2.1 The level of overall economic activity (notes)
3. 2.1 The level of overall economic activity (questions)
4. Section 2.2 Aggregate demand and supply (notes)
5. Section 2.2 Aggregate demand and supply (simulations and activities)
6. 2.2 Aggregate Demand and Aggregate Supply (questions)
7. 2.3 Macroeconomic objectives (notes)
8. Low Unemployment
9. 2.3 Macroeconomic objectives (questions)
10. 2.4 Fiscal policy (notes)
    1. Fiscal policy - introduction
    2. The government budget
    3. Types of government expenditure
    4. A Case study: Government spending in the UK
    5. The budget outcome
    6. Fiscal policy and short-term demand management
    7. Impact of automatic stabilisers
    8. Fiscal policy and its impact on potential output
    9. Evaluation of fiscal policy
    10. The multiplier effect & fiscal policy
    11. Accelerator
    12. Crowding out
11. 2.4 Fiscal policy (questions)
12. 2.5 Monetary policy (notes)
13. 2.5 Monetary Policy (questions)
14. Section 2.6 Supply-side policies (notes)
15. 2.6 Supply-side policies (questions)
16. Print View

Fiscal policy - introduction

What is Fiscal Policy?

Definition: Fiscal policy is the use of government expenditure and taxation to manage the economy.

Fiscal Policy can:

• boost the level of economic activity if there is a shortage of demand which is causing a deflationary gap. In this case, it is called reflationary policy.

• reduce the level of economic activity if too much demand in the economy is causing an inflationary gap . In this case, a deflationary policy is appropriate.

• be a supply-side policy ,used to improve incentives, e.g. through income tax cuts, or to improve the quality of resources, such as increased government expenditure on health and education and subsidies to key areas