Macro: Unit 3.2 -- The Effects of Fiscal Policy
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In this video, I will:
Identify the appropriate fiscal policy needed to return an economy to equilibrium when it is
experiencing an inflationary or a recessionary gap
Discuss the multiplier effect and how that effect will eventually close a GDP gap
Walk through how changes in government spending or tax policy will alter income levels and
set off a chain of events that correct economic conditions through changes in aggregate
demand
Investigate how expansionary and contractionary fiscal policy affect economic indicators,
including price level, Real GDP, the unemployment rate, standard of living, income and
consumption levels, and net exports
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