Introduction to Macroeconomics

Chapter 8. Government Fiscal and Monetary Policy

Contents

1. Fiscal Policy
2. Monetary Policy
3. Discretionary vs Non-discretionary
4. Demand-side vs Supply-side

1. Fiscal Policy

Fiscal Policy - the use of government spending and taxation to influence aggregate economic activity. Monetary Policy - the use of changes in money supply to influence aggregate economic activity.

Discretionary Policy - a fiscal or monetary policy that can be changed by policy-makers.

Demand-Side Policy - fiscal or monetary policy intended to alter the overall level of aggregate demand. Supply-Side Policy - fiscal or monetary policy intended to alter the overall level of aggregate supply.

File last modified: September 1, 2002

© Tancred Lidderdale (Tancred@Lidderdale.com)