IN CONCLUSION: WEEK OF DECEMBER 2nd

Recap

Changes in government spending and/or taxes, or a combination of the two describes discretionary fiscal policy. There are two types of doses: expansionary fiscal policy and contractionary policy.

Discretionary fiscal policy measures pertain to the prescription proposed by Keynes in his argument that the government is needed to stimulate or discourage spending in the economy.

You may have discovered that, discretionary fiscal policy, particularly expansionary fiscal policy is a contentious policy that is the last resort for politicians. Its very nature encompassing government spending and tax cuts brings up many questions as to how to spend funds, on whom and how much, as well as to who should receive tax cuts and by how much.

Despite the controversy surrounding government spending and tax cuts, every administration seems to do it, particularly during periods in which the economy does not need stimulus. Another important aspect that is rarely pointed out is the misconception that all spending is bad. All government spending is not inherently bad. Only government spending that leads to no future economic growth is frivolous and bad for the economy, for it causes budget deficits and debt levels to rise that cannot be reduced in the long-run by economic growth.

Looking Ahead

This coming week, you have your third and last study guide due. As stated in the syllabus, it is due on Wednesday, 12/11, by 11:59pm. Please make sure of the policies surrounding the assignment and get it submitted on time. Please don't make it awkward the next day for not having turned it in or having turned it in incomplete as well. Finals week is coming soon so make sure to start preparing.