Throughout the course, we have seen competing viewpoints about the role of policymakers with regards to expanding and contracting the economy. There are debates about to what degree the government can influence the economy to whether the government should even try. These debates are often originated with an economic school of thought. That is to say, a philosophical underpinning. May you research various economic schools of thought (try econlib.org) and select one of the major schools of thought and describe it, explain its position, and explain how/if it is relevant today and why?
Part 2. Respond to the following in a minimum of 150 words:
Compare and contrast expansionary and contractionary fiscal policy.
Part 3. Reply to the following post in a minimum of 100 words:
“Expansionary fiscal policy when is taxes are cut or there’s an increase in government spending. Contractionary fiscal policy is opposite. This occurs when tax rates are increased or there’s a decrease in government spending.
The reasoning behind the contractionary fiscal policy is to help slow the economic growth which has some negative effects to it. For one, it creates inflation because prices increase, and the cost of living goes up which makes it harder for those to save. The cost of living and buying homes happens which is one of the reasoning behind the housing and real estate crisis in 2008. It causes the money supply to decrease which causes the consumers to not purchase to must. Without consumers buying services and goods, it reduces profit for businesses forcing more layoffs or business closures.
Expansionary fiscal policy is often used to build up a healthier economy. This is especially important during a recession. This is the time the government wants to reduce the unemployment rate and increase money supply so that consumers can begin buying again.” – Amanda G
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