Lesson Plan: Monetary and Fiscal Policy
- I. Fiscal Policy
- - Should the government's budget always be balanced?
- - how about for individuals?
- - the lesson of the depression.
- - conclusions
- - what constitutes fiscal policy?
- - changes in G
- - changes in T
- - changes in G and T
- - balanced budget changes in G
- - Crowding out = the tendency of increases in government
spending to reduce some private
spending.
- - full employment crowding out
- - does crowding out also occur at less than full
employment?
- II. Monetary Policy
- - Policy (target) variables
- - national income/output (i.e., unemployment)
- - the price level (i.e., inflation)
- - etc.
- - Policy instruments
- - monetary base
- - interest rates
- - etc.
- - Policies
- - stable growth in the money supply
- - constant interest rates
- - etc.
- III. The application of monetary or fiscal policy
- - examples
- - the relative effectiveness of fiscal vs. monetary policy
- - the monetarist view
- - the keynesian view
- - conclusions
- - expansionary vs. recessionary policies
- - fiscal vs. monetary policy
- - applications
- IV. Topics
- - the phillips curve
- - rational expectations