-How a government taxes and spends money

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Presentation transcript:

-How a government taxes and spends money Fiscal Policy -How a government taxes and spends money

Government Spending -Government Increases Spending -Keynesian Economics -Effect on the Economy -Government Decreases Spending

Taxation -Government Increases Taxes -Effect on the Economy -Government Decreases Taxes -Supply Side or Trickle Down Economics

Monetary Policy -How the government regulates the amount of money in circulation -Regulated through the Federal Reserve System -The supply of money can be described as tight monetary policy or easy monetary policy according to the actions of the government

Interest Rates -Gov’t controls a basic interest charge that is called the discount rate---which is used by banks -Raising Interest Rates (tight monetary policy) -Lowering Interest Rates (easy monetary policy)

Reserve Requirements -Reserve Requirements are the amounts of money the gov’t requires banks to keep as deposits -Raising Reserve Requirements -Lowering Reserve Requirements

US Savings Bonds -Government BUYS Bonds back from Consumers -Government SELLS Bonds to Consumers