Discussion Post: Fiscal Policy
Respond to the following four questions in a minimum of 175 words each question
• Describe the two schools of thought in keeping the economy on a long-term growth path,
• Explain fiscal and monetary policies.
• Compare and contrast expansionary and contractionary fiscal policy.
As you will discover, the primary goal of expansionary fiscal policy is to increase real gross domestic product (GDP). One way that the government can accomplish this is to reduce taxes. Another way would be for the government to increase purchases. When government purchases are increased, the amount of the increase in aggregate demand primarily depends on the size of the government spending multiplier.
• How is this multiplier calculated?
• What is the meaning of MPC and MPS?
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.