Ch. 12 Reading Guide

Due Wed. 1/4/17


1.  Describe expansionary fiscal policy.  When would it be used?  What tools would government use to enact such a policy?  Illustrate the impact of expansionary fiscal policy on an AS/AD diagram originating from a recessionary gap.






2.  Describe contractionary fiscal policy.  When would it be used?  What tools would government use to enact such a policy?  Illustrate the impact of contractionary fiscal policy on an AS/AD diagram originating from an inflationary gap.










Due Thus. 1/5/17


1.  Identify and define each of the automatic/autonomous fiscal policy stabilizers.  Explain how each stabilizer would act without the actions of Congress and the President to impact the economy during an:
a.  time of recession/high unemployment
b.  time of inflation