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Nov. 13 th, 2002ECON 1 – Section 20 – Page 1GSI: R. Estopina ECON 1 – Section 20 Stabilizing Aggregate Demand: The Role of the Fed.
Keynesian view Discretionary versus non-discretionary fiscal policy The automatic stabilizers Fiscal policy to close a contractionary gap. The tax multiplier.
1 Fiscal Policy CHAPTER 12 © 2003 South-Western/Thomson Learning.
Chapter 13 Fiscal Policy. The Multiplier Formula (cont’d) Can use this formula to find the impact on real GDP of any given change in aggregate demand:
1 The Policy Debate: Active or Passive? CHAPTER 31 © 2003 South-Western/Thomson Learning.
Study Guide Chapters 19-22 What 2 factors can cause GDP per capita to increase? Output per worker increases or share of population employed increases.
Fiscal Policy
Chapter 13
Chapter 13 U.S. Economic History. Early 1900’s 1900’s Events Financial Panic of 1907 Much regulation –The Jungle 1910’s Events FED created in 1913 World.