The Role of Fiscal Policy in the Economy

Please note that if you edit your initial response (Original Post), you will not get  credit for the Original Post. The discussions are set up as "Must post first".

The Role of Fiscal Policy in the Economy

• Fiscal Policy: Economic Effects

https://fas.org/sgp/crs/misc/R45723.pdf

• Fiscal Policy: Taking and Giving Away by Mark Horton and Asmaa El-Ganainy

https://www.imf.org/external/pubs/ft/fandd/basics/fiscpol.htm

In your initial response to the topic you have to answer all questions:

1. Discuss the effect of fiscal policy on interest rates and investment. Explain crowding out effect.
2. Discuss the effect of fiscal policy on inflation.
3. Discuss the effect of persistent fiscal stimulus on the economy in the long run.
4. Describe the mechanism how changes in fiscal policy affect output and prices in the economy.
5. Reflection – the students also should include a paragraph in the initial response in their own words, using macroeconomic terminology, reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life.

Please also note that your answers should be written in your own words. Don’t use quotes from the articles to answer the questions.

You are expected to make your own contribution in a main topic as well as respond with value added comments to at least two of your classmates as well as to your instructor.