Fiscal Policy Tools

Definition Prompt:Define fiscal policy in your own words in approximately two to three sentences.Hint: Fiscal policy can influence the GDP.Essay Prompt 1:Write an essay of approximately three to four paragraphs that explains government spending as a fiscal policy tool. Be sure to answer the following question: How does government spending influence economic output?Example: The money that businesses earn from government spending can result in the need for more employees, and those employees can stimulate the economy by spending a portion of their wages.Essay Prompt 2:In one to two paragraphs, write an essay that explains how taxes can be used as a fiscal policy tool.Example: Tax rates can be raised or lowered.Essay Prompt 3:In approximately two to three paragraphs, write an essay that describes transfer payments as a fiscal policy tool. Be sure to answer the following question: How are transfer payments similar to taxes as a fiscal policy tool?Example: Transfer payments include things like Social Security payments, and they can alter people’s incomes and spending power.Graphic Organizer Prompt:Create a poster, chart, or other type of graphic organizer that compares and contrasts expansionary fiscal policy and contractionary fiscal policy.Example: Contractionary fiscal policy can be used to curb inflation, while expansionary fiscal policy can be used to increase aggregate demand.