When natural rates are low and policy rates are constrained by the lower bound, a more accommodative fiscal policy is needed to lift the economy out of a low-growth, low-inflation trap. Its goal is to slow economic growth and stamp out inflation. "When you look at the U.S., the prospect for either near-term fiscal policy or sizable medium-term fiscal policy is much reduced," said James McCormick, a strategist at NatWest Markets. These policies are examples of expansionary fiscal policy.If government wants to slow down aggregate demand, it would pursue a contractionary fiscal policy.To ... Macroeconomics LESSON 8 ACTIVITY 31 UNIT Activity written by David Nelson, Western Washington University, Bellingham, Wash. Hopes for a large fiscal stimulus package are also ebbing, investors said. It uses Activities 30, 31, 32 and 33. The tools of contractionary fiscal policy … Lesson … Students will read the quote and determine whether the quote is about fiscal policy, monetary policy … Expansionary fiscal policy and contractionary fiscal policy Fiscal policy instruments The budget deficit Bonds Market of money Monetary policy Expansionary monetary policy and contractionary monetary policy Monetary policy instruments . The fiscal policy is a process that makes use of a government’s revenue generation and expenditure as tools to control economic windfalls. Concepts covered: Fiscal Policy, Deficit. It was a mistake to let fiscal policy off the hook during the lethargic post-2008 recovery by overstating the potency of monetary policy. Download Activity 7 (pdf) Federal Government Debt. Fiscal Policy. This policy is also known as budgetary policy. The ARRA illustrates an important difficulty of using fiscal policy in an effort to stabilize economic activity. The government uses the fiscal policy to stabilize the economy during a business cycle. Activity 7 focuses on the U.S. government’s budget. Explain to students that they will evaluate quotes from several news sources from 2010 through 2012. In Table 5-3.1, use ↑ or ↓ to indicate what effect each specific policy has on inflation and real output in the short run. 7. Review Activity 28. Activity Real-World Connections: Fiscal and Monetary Policy This activity connects fiscal and monetary policy actions to the real economy. Fiscal policy—the use of government expenditures and taxes to influence the level of economic activity—is the government counterpart to monetary policy. Lesson 7 relates the long-run aggregate supply curve and the economy’s production possibilities curve. Macroeconomic policy is concerned with the operation of the economy as a whole. Inflation can be reduced by policies that slow down the growth of AD and/or boost the rate of growth of aggregate supply (AS) Supply side policies seek to increase productivity, competition and innovation – all of which can maintain lower prices. Fiscal Policy. The Story of Monetary Policy High School Lesson Plan . 5. Vote Federal Reserve Board The ________ has primary control over monetary policy, and is relatively independent from the control of Congress and the president. 6. Students will interpret the following headlines and scan the corresponding articles or op-eds to identify whether the topic relates to fiscal or monetary policy actions, then will fill in the corresponding tables. Fiscal policy 1. The data from thi s activity will be used in the extension activity for this unit. Goal: To help students have a better understanding that through representative democracy citizens have a “voice” in government. 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