Fiscal Policy. To where does the money ripple?

Slides:

Advertisements

Similar presentations

Federal Reserve and Macroeconomic Policy

Advertisements

The Federal Reserve System

Mr. Weiss Unit 5 Vocabulary Words 1. gross domestic product (GDP); 2. inflation; 3. real GDP; 4. consumer price index (CPI) _____total dollar value of.

The Federal Reserve (Review From Monday)

LEQ: What is the role of the Government in the Economy? –Money –Monetary and Fiscal Policy –Economic Indicators (GDP)

Bellringer Quiz Notes: Federal Reserve Exit Ticket AGENDA.

Economic Policymaking

Fiscal and Monetary Policies The Government’s Role In the Economy.

Macroeconomics that part of economic theory dealing with the economy as a whole and decision making by large units such as governments and unions Click.

January 2008 Macro Headlines. Goldman Sees Recession This Year (WSJ 1/9) The recent economic data has not been pretty, and the recent jump in the unemployment.

In December of 2007, approximately 7.5 million Americans were unemployed. Today, three years later, that number stands at 14.9 million.

The Federal Reserve System Lecture 6.7. Federal Reserve Central bank of the U.S. that controls the size of the money supply to –help regulate the economy.

The Federal Reserve The Federal Reserve The Central Bank of the United States.

Government & the U. S. Economy What does the government do to keep the U.S. economy from acting like a roller coaster: INFLATION rising prices & increasing.

Glossary of Key Terms business cycle. A cycle of economic activity with periods called contraction, trough, recovery, and peak. collusion. When companies.

Economic Policy Fiscal policy - Taxing, spending, and borrowing policies of the federal government. Monetary policy – directed by The Federal Reserve (The.

Chapter 15 The Federal Reserve System & Monetary Policy

FISCAL AND MONETARY POLICY. ECONOMIC GOALS Full Employment Enough jobs to employ all able and willing to work Unemployment/Employment Data Bureau of Labor.

THE FEDERAL RESERVE You can BANK on it!. Objectives STUDENTS WILL BE ABLE TO: Understand why the formation of a National Bank was necessary. Describe.

Unit 2: The Government, Banking and the Economy. Who in government has the responsibility to respond when the economy is in trouble? The President? Congress?

Unit 1.04 The Business Cycle Measuring Economic Activity.

Government and the Economy Role of Government Money and Banking The Federal Reserve Government Finance.

FISCAL AND MONETARY POLICY How do policymakers use fiscal and monetary policy to stabilize the US economy?

Fiscal Policy How We Decide to SPEND or COLLECT Money.

MACRO ECONOMIC GOVERNMENT POLICY. NATIONAL ECONOMIC POLICY GOALS Sustained economic growth as measured by gross domestic product (GDP) GDP is total amount.

Introduction to Business Concepts Review. Factors of Production Resources nations need to create wealth  Land  Labor  Capital  Entrepreneurship 

FEDERAL RESERVE (FED) *** In charge of the nation’s money supply.

Measuring the Economy Goals 9.01 & Why does the government need to know what the economy is doing?  The government makes decisions that affect.

MACROECONOMICS THE STUDY OF THE ECONOMY AS A WHOLE.

Cyclical Unemployment Occurs because of a downturn in the economy. (SSEMA1_d)

The Federal Reserve In Action. What is the Fed?  Central bank of the United States  Established in 1913  Purpose is to ensure a stable economy for.

MACROECONOMICS.  Analyzes interrelationships among sectors of the economy.

Review of U.S. Economy. Review of Macro Concepts Unemployment (Ch. 7) Inflation (Ch. 7) GDP (Ch. 8) Economic growth & determinants (Ch. 9) Money, central.

How does the Gov’t address the Problems with the Business Cycle (Inflation and Recession) 1. Fiscal Policy 2. Monetary Policy.

Section Outline 1 of 7 Money and Banking Section 3: The Federal Reserve System I.The Federal Reserve System II.Organizing the Fed III.Functions of the.

Government Chapter 20.2 Monetary Policy. General Economics competition The existence of two or more companies within a single industry that are trying.

Macroeconomic Issues The Great Recession: GDP begins to drop Shaded area = recession.

Call to Order President Obama says that the government doesn’t have enough money to pay for all of the programs that he wants. Why doesn’t he just print.

FISCAL AND MONETARY POLICY MIX Principles of Macroeconomics Lecture 8c.

Federal Reserve Notes Structure & Functions. I. Purpose: to keep the economy stable  Goals: high employment, stable prices, economic growth  Enemies:

Chapter 3 Economic Activity in a Changing World Section 3.2 The Business Cycle.

American Government Unit Chapter 16: Financing Government IV. Fiscal and Monetary Policy.

Read to Learn Describe the four stages of the business cycle. Explain how individuals and government influence the economy.

The Federal Reserve System and Monetary Policy. Money Final payment for goods and services Purposes of money: – Medium of Exchange: It can be used to.

 Problems, Policy, and The Fed.  Economic Problems: o Inflation o Loss of wages for workers o Lowered standard of living o Unemployment o Recession.

The Federal Reserve Fiscal Policy - Using taxes and spending to help the economy grow. Monetary Policy - Policy that involves changing the rate.

Monetary Policy Using the amount of money and credit available to consumers to influence the economy.

  Success or failure usually rests with whom the public perceives is responsible for the condition of the economy  Whether it is true or not, the electorate.

Brian Austin Jake Howry Sarah Lenau Brian Murphy.

The Federal Reserve Monetary Policy: Goals & Challenges.

Ch Taxes & Govt. Spending Sect. 1 - What are Taxes Tax - Payments to the govt. that allow the govt. to operate The Power to Tax - Article 1, Section.

The Federal Reserve: What They Are, What They Do..

MACROECONOMICS Study guide for EOC.  Macroeconomics is the study of the economics of a nation as a whole.  GDP- (gross domestic product) is the total.

5/7Warm Up What monetary policy tools can the Fed use to slow down rapid economic growth?

DEBIT CARDS VS. CREDIT CARDS How are they different???????

Monetary Policy Tools Describe how the Federal Reserve uses the tools of monetary policy to promote price stability, full employment, and economic growth.

Chapter 3 Economic Activity in a Changing World Section 3.2 The Business Cycle.

Chapter 16: Financing Government Section 4. Copyright © Pearson Education, Inc.Slide 2 Chapter 16, Section 4 Key Terms gross domestic product: the total.

Fiscal Policy and the Federal Reserve. Early History The United States government largely adhered to free market practices throughout the 18 th and 19.

Fiscal Policy vs Monetary Policy. Fiscal Policy The word fiscal simply means “of or relating to government revenue or taxes” Fiscal Policy is the governments.

Ch. 18 ECONOMIC POLICY.

The Governments Bank and the Bank for the Banks…

Chapter 14: Fiscal and Monetary Policy

Unit 6: Macroeconomic Systems & the U. S

You will be given the answer. You must give the correct question.

Fiscal and Monetary Policy

The Role of Government Actions that Impact the Economy

The Federal Reserve and Monetary Policy

Economic Policy Public Policy.

Problems, Policy, and The Fed

Presentation transcript:

Fiscal Policy

To where does the money ripple?

John Maynard Keynes, father of ‘deficit spending’

You are Congress. Your job is to analyze part of Obama’s stimulus proposal. Your group will be given a list of stimulus spending. Groups are to evaluate the effectiveness of the items, choosing three that are effective and three that are not. Use the economic ripple effect to evaluate it: Does the item create a far- reaching, effective economic ripple effect, or is it a waste of money?

The Federal Reserve Bank

Former Fed Chairman Ben Bernanke

New Chairman Janet Yellen

The Fed monitors the economy in each of these areas, then acts to regulate the nation’s economy as a whole.

The Fed determines the amount of money in circulation, and also shreds nasty old money

The Fed clears all checks

Most importantly, the Fed loans money to banks, and therefore sets the national interest rate.

Great! Credit cards are swiping again. But what problem could arise now that people are shopping and buying more?

Paul Volcker, recession of 1982

What will the Fed do to interest rates in each of the following situations?

1. For the 6 th straight month, the unemployment rate increases, now standing at 10.5%. 2. The CPI is showing an inflation rate of 7% annually. 3. For the 3 rd quarter in a row, GDP growth is at 0%. 4. We are at full employment, and businesses are having a hard time finding workers. 5. New home construction has shown its 6 th straight month of decline.

6. GDP growth is at a record pace, averaging 8% for the past nine months. 7. Consumer spending shows 7 th straight month of increase.

Franklin Roosevelt’s New Deal ( )

Name the President who created the first massive government sponsored stimulus package, give me the name of his overall program, and give me the decade in which it took place.