Econ Lowdown

15 minutes

Middle School - College

187 classes this year

Subjects: AP Economics Economics

Topics: Business Cycle Economic Fluctuations Fiscal and Monetary Policy Role of Government and Market Failure Unemployment

“Recession” is one of the scariest words in economics. The loss of jobs and income can have lasting impacts on people’s lives. How does the economy get back on track when it’s off course? In this episode of The Economic Lowdown series, you’ll learn about how the government uses fiscal policy to influence the economy.

Voluntary National Content Standards in Economics

Standard 20: Fiscal and Monetary Policy

Grade 12

1. Fiscal policies are decisions to change spending and taxation levels by the federal government. As fiscal policies, these decisions are adopted to influence national levels of output, employment, and prices.

2. In the short run, increasing federal spending and/or reducing taxes can promote more employment and output, but these polices also put upward pressure on the price level and interest rates. Decreased federal spending and/or increased taxes tend to lower price levels and interest rates, but they reduce employment and output levels in the short run.

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