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Fiscal Policy: The Best Case Scenario
| Content Provider | WatchKnowLearn |
|---|---|
| Description | In this video, we explore when and why the government might engage in expansionary fiscal policy. Specifically, we’ll discuss why the government might increase spending, or decrease taxes, to combat a recession. Think about an economy during a recession. Consumers are spending less. Aggregate demand is down. And we’re looking at negative growth. In the long run, the economy will adjust. But in the short run, sticky wages and prices leave a lot to desire. In this case, the government has some options. It could do nothing and wait for the economy to bounce back – a slow and painful process. Or it could reduce taxes or increase spending. The spending option has the potential to increase the velocity of money and thereby increase aggregate demand. This will, at least in the short run, increase real growth and help ease the pain of the recession. This may all sound really simple. But consider the reality of implementing fiscal policy: You’re shifting around resources in a multi-trillion dollar economy. Like monetary policy, it’s hard to get fiscal policy just right. We’ll delve deeper into these complications in the next video. |
| Language | English |
| Access Restriction | Open |
| Rights License | Educational Community License |
| Subject Keyword | k-12 homeschool Fiscal Policy homeschooling home school parents educational videos k12 preK-12 Social Sciences Economics and Business Economics Social Studies Economics Concepts Macroeconomics |
| Content Type | Video |
| Educational Role | Student Teacher |
| Educational Use | Self Learning Lecture |
| Time Required | PT3M38S |
| Education Level | Class XI Class IX Class XII Class X |
| Pedagogy | Lecture cum Demonstration |
| Resource Type | Video Lecture |
| Subject | Fiscal and Monetary Policy |
