-can be used to stimulate economic growth during recessions
Increased gov spending:
tax reductions
Monetary Policy:
Interest Rates and Money Supply
Controlled by the Federal Reserve
Used to control Inflation and stabilize the economy
Keynesian Economics
use monetary and fiscal policies to stabilize the economy and prevent recessions.
government should increase spending during recessions to stimulate demand and boost economic growth.
support using monetary policy, such as lowering interest rates, to encourage borrowing and spending.
Supply-Side Economics
Less gov involvment
supports a limited role for the gov in marketplace regulation
cut taxes and regulations to
encourage investment and economic growth.
Lower tax will increase the incentive to work, save, and invest, leading to economic growth. They also believe that reducing government regulations will allow businesses to operate more efficiently, leading to increased productivity and economic growth.
