Review Notes - Monetary and Fiscal Policy

- Fiscal Policy

- Should the government's budget always be balanced?

- what constitutes fiscal policy?

- what is crowding out?

- full employment crowding out

- does crowding out also occur at less than full employment?

- which is largest?

- Monetary Policy

- Policy (target) variables

- Policy instruments

- possible policies

- stable growth in the money supply

- constant interest rates

- the relative effectiveness of fiscal vs. monetary policy

- the monetarist view

- the keynesian view

- expansionary vs. recessionary policies

- fiscal vs. monetary policy

- what is a phillips curve?

- what is rational expectations theory?

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