Expansionary and Contractionary Policy
Expansionary Fiscal Policy
-Is used during recession Impact on PL and RGDP: Increase PL Increase RGDP
Expansionary Monetary Policy
-Used during recession
Contractionary Fiscal Policy
-Used to control inflation
Contractionary Monetary Policy
-Used to control inflation
Contractionary Fiscal Policy Impact on AD
Decrease AD
Contractionary Monetary Policy Impact on AD
Decrease AD
Expansionary Monetary Policy Impact on Interest Rates
Decrease Interest Rates
Contractionary Fiscal Policy Impact on Interest Rates
Decrease Interest Rates Budget Surplus
Contractionary Fiscal Policy Impact on PL and RGDP
Decrease PL Decrease RGDP
Contractionary Monetary Policy Impact on PL and RGDP
Decrease PL Decrease RGDP
Expansionary Monetary Policy Tools
Decrease RR Decrease DR Buy Bonds
Expansionary Fiscal Policy Tools
Government Action: Decrease Taxes Increase Gov. Spending
Expansionary Fiscal Policy Impact on AD
Impact on AD/SRAS: Increase AD
Expansionary Fiscal Policy Impact on PL and RGDP
Impact on PL and RGDP: Increase PL Increase RGDP
Expansionary Monetary Policy Impact on AD
Increase AD
Contractionary Monetary Policy Impact on Interest Rates
Increase Interest Rates
Expansionary Fiscal Policy Impact on Interest Rates
Increase Interest Rates Budget Deficit
Expansionary Monetary Policy Impact on PL and RGDP
Increase PL Increase RGDP
Contractionary Monetary Policy Tools
Increase RR Increase DR Sell Bonds
Contractionary Fiscal Policy Tools
Increase Taxes Decrease Gov. Spending