1. Monetary and Fiscal Policy
Economics

2. Monetary Policy Monetary Policy Federal Reserve
The expansion or contraction of the money supply in order to influence the cost and the availability of credit
Federal Reserve
Privately owned, publicly run, central bank of the United States of America

3. Policy Matters The Federal Reserve takes place in Monetary Policy
They do this by either expanding or contracting credit markets
This is done by the raising or lowering of their interest rates

4. Government Spending Deficit Spending
This is the annual government spending in excess of taxes and other revenues
The continued use of Deficit spending in the United States is why our national deficit has now exceeded 13 trillion dollars

5. Fiscal Policy Fiscal Policy Keynesian Economics
This is the use of government spending and revenue collection measure to influence the economy
Keynesian Economics
These are a set of actions designed to lower unemployment by stimulating aggregate demand

6. More Keynesian
Keynes uses the following formula to determine what is wrong with GDP
This formula is GDP= C+I+G+F
After study, Keynes argued that lack of investment is what kills economic growth

7. The Effect
Keynes said that the lack of investment snowballed into lack of spending in other sectors
This is known as the multiplier effect
Further damage is done through the accelerator concept
This states that since there is less spending in the economy, investment slows even further, therefore causing the multiplier affect all over again.

8. The Role of Keynes
Through Keynes theory, the Government is supposed to be a counterbalance to changes in investment
This means that as private investing goes up, government investment goes down. This is also true in reverse.
This however has caused issues such as deficit spending as government agencies have issues cutting their own budgets

9. Supply Side Supply-side economics
These are policies designed to stimulate output and lower unemployment by increasing production rather than demand.
This policy can be enacted in a couple ways
Smaller Government
This includes deregulation of industry to allow them to more directly control their means of production
Lower Federal Taxes
This concept argues that if taxes are lower, more people will want to work, therefore increasing production and employment.

10. Price Controls
These are government controls on prices throughout the economy
Price Ceiling-
These are the highest prices that can legally be charged for a type of good
Price Floor-
These are the lowest prices that can legally be charged for a type of good