Fiscal Policy
Fiscal Policy is changes in government spending and/or taxation to achieve particular macroeconomic goals. Can be either expansionary (stimulating the economy) or contractionary (slowing the economy).
The below article is an example of an expansionary Fiscal Policy.
http://usa.chinadaily.com.cn/business/2011-01/17/content_11866307.htm
The Chinese government is planning on improving the living standards for the their people and improving infrastructure. They are planning on investing in a nationwide medical insurance system and offering affordable housing. These plans are part of the follow up programs to the 607 billion yuan economic stimulus package. With these plans in place this will hopefully help to provide more jobs which will help to lower the unemployment rate. The government is keeping a close look on these plans in order to not cause inflation.
The graph below is an example of an Expansionary Fiscal Policy showing the AD line shifting to the right.
Fiscal Policy is changes in government spending and/or taxation to achieve particular macroeconomic goals. Can be either expansionary (stimulating the economy) or contractionary (slowing the economy).
The below article is an example of an expansionary Fiscal Policy.
http://usa.chinadaily.com.cn/business/2011-01/17/content_11866307.htm
The Chinese government is planning on improving the living standards for the their people and improving infrastructure. They are planning on investing in a nationwide medical insurance system and offering affordable housing. These plans are part of the follow up programs to the 607 billion yuan economic stimulus package. With these plans in place this will hopefully help to provide more jobs which will help to lower the unemployment rate. The government is keeping a close look on these plans in order to not cause inflation.
The graph below is an example of an Expansionary Fiscal Policy showing the AD line shifting to the right.