Introduction to Fiscal Policy - Expansionary vs. Contractionary Policies

This video lesson will introduce the use of fiscal policies by a government aimed at expanding or contracting the level of eocnomic activity in the nation. Changing the amount of government spanding and taxation can influence several macroeconomic variables, such as employment, price levels and the level of output. When should a government alter the level of taxes and spending it engages in? This lesson will introduce two circumstances under which fiscal policy may be used to promote the achievement of various macroeconomics objectives.
Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! econclassroom.c...

[@JasonWelker]

Given your logo, I suspect I know your position on the matter. The taxes Obama hopes to raise are on the highest income earners, who have the highest average propensity to save in the economy, meaning that much of the increase will reduce savings, not consumption. This way, savings (which is a leakage, contributing little to economic activity), is turned into spending, contributing to employment through investments in the economy's infrastructure. This is not Obama's outlook at present, however.

[@jacobchristianglover3655]

Thank you very much for taking the time and effort to produce this video, it helped me a great deal. I subscribed to your channel and hope to find more work like this. Be Well!

[@nt-fo3xr]

I am so failing economics :')

[@JasonWelker]

You'll do fine! Let me know how I can help! econclassroom.com

[@zuriiima936]

Did you pass? lol

[@exposurebyanjum]

Thank you Sir, It really helped me in understanding the topic!!! God Bless You!!!

[@JasonWelker]

You don't have to increase taxes to increase government spending. You can borrow the money, called "deficit spending", which increase the national debt instead.

[@AllaahuAkbar60]

Greetings from SULTANATE OF OMAN

[@joangayle-reid7110]

Thanks for making this video! It really help... continue doing this.

[@maximiliankaiser9838]

Great Video! But you may want to consider investing in a less crunchy microphone to spare your viewer's eardrums!

[@JasonWelker]

That is a good suggestion for a future video! Thanks!

[@DELTASierra-13]

This video was really informative, thank you! I've been given a project to "Consider whether it would be appropriate for the British government to focus on using fiscal policy to expand demand, in order to promote economic growth in the United Kingdom." How best do you think I could answer this?

[@mararodriguez2201]

could u upload any pdf notes? your videos/notes are so useful

[@LucisFerre1]

Jason, What do you think of Obama's outlook, raising tax rates (& supposedly tax revenues) whilst also increasing government spending simultaneously? What in the world is that supposed to achieve in regard to increasing aggregate demand and lowering unemployment?

[@jonyjony733]

what an explanation.... really genius thank u

[@kuhelibegum]

Nicely explained. Anyone else wonder why our college professor can’t teach like this?

[@mikeymarinakis8706]

anyone got the answers to the worksheet that links to this

[@1sockmonkey1]

yuh what the hell is a discretionary and non discretionary BOIIIIIII

[@abbieyi]

boi discretionary is when congress creates a new law or regulations to change AD trough tax and spending. For example, if there is recession, gov has to shift AD to the right to bring back to equilibrium, so they will decreaase tax and increase spending. Non-discretionary is already existing law or regulations that prevents inflation or recession. For example, unemployment benefit is an example of non discretionary regulation, because if unemployment rises, people spend less, thus bringing AD down. However, because of unemployment benefit, gov spend more money bringing the AD back up. Understood??

[@chelseyskeete24]

Thank you, this really helped a lot !

[@koyaraghunadh3113]

A very lucid, powerful and cogent interpretation of the topic.

[@StreetDancer171]

A very extensive vocabulary you have there. I approve.

[@mrpureism]

hello admin,namastae! can u tell me that in contactionary case,is the increase in real gdp from Ye to y1 is boom or something opposite to recession that existed in case of expansionary effect.why is it bad.is inflation the only reason we consider contraction step .why that increase is not desirable from Ye to y1

[@walusunguvital6869]

this was so helpful

[@spiritrapt]

in liberal economics, does the government not interfere in economic life? therefore this does not apply to the ideal liberal economy? thanks

[@ImSuperVince]

What happens if you ^G and ^T, I'm assuming it means ^AD so it's expansionary? But why?

[@mohamedlaminbangura3303]

Great

[@tinahflindornah4975]

Thank you sir 🌼love from South Africa

[@peterbarach4086]

Thanks a lot sir. I understand ur teaching better.

[@lovedieyoung2846]

thanks for your video, it's helpful :)

[@meenuvarghese9293]

do you have a contractionary monetary policy video

[@mysticmacho1470]

Mwali twafwa sana pa fresher yama lesa ale mipala, 👏

[@mosab495]

what amazing explanation .. .thank you so much

[@mehjabeenshaikh358]

thanks alot this video helped in my assignment thank you

[@Dudemar0]

The SRAS and LRAS are the wrong way around!

[@trustmadare2317]

thanks sir for your video very helpful

[@samiullahafridi94]

think u sir i understand ur teaching better.

[@x3xconx3x]

I love you!! Thank you so much. this video helped me out with my assignment sooo much!!

[@sriramsenthil]

what about Non-discretionary vs Discretionary

[@saurabh2singhal]

Nice Explanation.. Very useful video

[@1981513]

very good explanation.

[@bammbamm12]

I don't go to the store to buy stuff. I go to ebay or Craigslist.

[@StreetDancer171]

You trying to ruin the economy?

[@bammbamm12]

WaveDancer171 - No - I filter out ex USA sources.

[@nazaninmiraj1006]

👍

[@jobgoddard5980]

#HERO

[@AmrAbouelela]

wonderful!

[@QuestionConvictions]

My macro principles class covered this in about 3 minutes. Thanks!

[@axmedgaab3309]

I living Somalia,thank you So munch