The concepts of fiscal policy

    Explore the concepts of fiscal policy and the attempts the U.S. government takes when the U.S. economy is in a recessionary or inflation gap. Is a recessionary or inflationary gap bad for an economy? Have you ever wondered how the federal government and the Federal Reserve react to smooth out recessionary and inflationary gaps? Discuss the concepts of aggregate supply and aggregate demand to determine how the U.S. economy can work its way back to long-run equilibrium based. Interpret recessionary and expansionary gaps within the economy. Explain the inter-workings of fiscal policy tools. State how taxation and government spending works. Differentiate between fiscal and monetary policy. Demonstrate the mechanics of discretionary fiscal policy within the Keynesian framework.