Fiscal Policy.notebook January 14, 2016 Warm Up: Fiscal Policy: - - PDF document

Fiscal Policy.notebook 1 January 14, 2016

Mar 5­10:11 PM

Warm Up: Socrative Fiscal Policy Pre-Quiz Code: 880cce2d

Feb 10­12:48 PM

Fiscal Policy: the use of government spending and revenue collection to influence the economy

Who can do this? What are the two tools they can use?

Mar 6­12:27 PM

Problem: Recession Your Tools: Government spending and taxation Goal: Expansion HOW WILL YOU FIX THE ECONOMY? Problem: Inflation Your Tools: Government spending and taxation Goal: Reduce price level HOW WILL YOU FIX THE ECONOMY?

Feb 23­4:09 PM

Fiscal Policy

is made by _______________________ and _______________________ in order to ________________________________________________

When the economy needs a "boost" (Expansionary Fiscal Policy)

When the economy needs to "cool off" (Contractionary Fiscal Policy) The president and Congress will... The president and congress will

...

____________ taxes ____________ spending ________________ taxes ________________ spending

Feb 23­4:38 PM

To Boost the Economy... The president and Congress will ­ Cut Taxes ­ Increase Spending

PL AS PL1

Impact:

• Real GDP _________

Business Cycle _______

• Unemployment _____
• Price Level

Real GDP AD R1

Warm Up:

Show shift! Interpret shift!

Feb 23­4:42 PM

To "Cool Off" the Economy.. The President and Congress Will ­ Raise Taxes ­Cut Spending

PL Real GDP AS AD PL1 R1

Impact: Real GDP______

• _____________
• Unemployment ___

Price Level

Fiscal Policy.notebook 2 January 14, 2016

Feb 15­8:26 AM Mar 5­10:13 PM

Socrative Exit Ticket!

Mar 6­10:56 AM Warm Up:

• 1. Who makes fiscal policy?
• 2. What are the tools of fiscal policy?
• 3. What are the ultimate goals of fiscal policy?
• 4. How might government use the tools of fiscal policy to

correct a recession? Mar 6­4:36 PM

Warm Up: Take out your sheet from yesterday. Begin working on the BACK side.

Feb 10­10:06 AM

Annual Message to Congress on the State of the Union, December 1930, by Herbert Hoover "Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body­­the producers and consumers

• themselves. Recovery can be expedited and its effects

mitigated by cooperative action. That cooperation requires that every individual should...maintain his self­reliance; that each and every

• ne should search for methods of improving his business or

service...that each should seek to assist his neighbors who may be less fortunate; that each industry should assist its own employees; that each community and each State should assume its full responsibilities for organization of employment and relief of distress..."

Feb 10­10:06 AM

Presidential Nomination Address, 1932, by Franklin Delano Roosevelt "When ­­ not ­if­­ we get the chance, the Federal Government will assume bold leadership in distress relief. For years Washington has alternated between putting its head in the sand and saying there is no large number of destitute people in our midst who need food and clothing, and then saying the States should take care of them, if there

• are. Instead of planning two and a half years ago, they kept putting it
• ff from day to day, week to week, and month to month, until the

conscience of America demanded action. I say that while primary responsibility for relief rests with localities now, as ever, yet the Federal Government has always had and still has a continuing responsibility for the broader public welfare."

Fiscal Policy.notebook 3 January 14, 2016

Feb 10­10:13 AM

• 1. Hoover's plan for economic recovery:
• 2. Roosevelt's plan for economic recovery:
• 3. Main Idea Sentence:

While Hoover believed that _____________________________________ Roosevelt felt that _____________________________________.

Feb 10­10:06 AM

Where were Roosevelt's ideas coming from?

Feb 10­12:46 PM

So...Keynes thinks the government should play a role in the economy, basing his ideas on:

GDP = AD = C+I+G+NX

What are some problems with this plan?

Feb 10­4:40 PM

Criticisms of Keynesian Economics

Feb 15­8:23 AM

Deck the Halls with Macro Follies

Feb 10­4:27 PM

Closing: Edmodo Exit Ticket­ List three short­comings of using fiscal policy to influence the economy.

Fiscal Policy.notebook 4 January 14, 2016

Mar 6­10:57 AM

Student Activity: E­groups: You will diagram the overall process of expansionary fiscal policy. C­groups: You will diagram the overall process of contractionary fiscal policy.

Mar 6­10:59 AM

Diagram Requirements:

• 1. Identify the problem.
• 2. What will you do to fiscal policy tools?
• 3. Provide a step-by-step analysis of

HOW this policy works toward Economic Growth, Price Stability, and Fiscal Policy.

Mar 6­11:01 AM

Step 1: ___ Taxes ___ Govt Spending Step 2: Describe impact

• n incomes

Step 3: Describe impact

• n

AD=C+I+G+NX What are people going to do?

Draw Model

Interpet change in PL, GDP and Unemp. What does this mean in terms of the health of the economy? Goals: Economic Growth, Price Stability, Full Employment

Feb 18­2:57 PM