Lesson: What is Fiscal Policy?

Open Ended

Explain the two main types of fiscal policy, and analyze their primary goals?

Multiple Choice

Which of the following is the primary goal of expansionary fiscal policy?

• To reduce government spending

• To decrease aggregate demand

• To increase aggregate demand and stimulate the economy

• To control inflation

Open Ended

Explain how implementation lags and political pressures affect the effectiveness of fiscal policy in stabilizing the economy