We will be using Cornell Note Taking Format Today! Let’s Get Fiscal! Let’s Get Fiscal! Happy thought for the day: “There are only two certainties in life: Death and taxes!”

Unit Two: Learning Objectives: North Clackamas School District Social Studies Priority Standards:   Econ 46. Distinguish between fiscal and monetary policies and describe the role and function of the Federal Reserve.

Lesson Three: Daily Learning Target I Can define and explain in writing the following key Economic concepts:  Fiscal Policy  “G”: Government Spending  “T”: Taxes  Monetary Policy

The use of government spending and revenue collection to influence the economy.

This Lesson confronts the following questions: I’ll throw money at the problem.

$7 trillion $8 trillion $9 trillion

Social Security [20%] Defense [19%] Welfare Unemployment [16%] Medicare [13%] Medicaid [8%] Interest[6%]

Federal Reserve U.S. Government Agencies U.S. Individuals Foreign Ownership U.S. Banks And other Financial Institutions Other, Including State and Local Governments 7% 10% 23% 11% 7% 36% Total Debt: $14.9 trillion [This is held both privately and publicly]

Thanks, we need this for our crumbling infrastructure.

Think of the “G” & Fed as doctors of the economy. They keep track of vital signs [GDP, Inflation, unemployment, etc]. I f a problem arises, they step in to prescribe a remedy.

Even if I have to dig a hole and cover it back up, I do have a job. Peak Peak Trough Contraction Contraction Contraction Contraction Expansion Expansion

Unempl. check

2014 $16 trillion more It has taken 32 years to accumulate $16 trillion more. $17.6 trillion [now $17.6 trillion] $55,000 each Will today’s children bear the burden of debt? 1981 $1 trillion of Debt It took 200 years to accumulate the 1 st $1 trillion of Debt. Teddy?

“Monetary Policy” refers to the actions that the Fed takes to influence the level of GDP and the rate of inflation in the economy.

…to assist the economy in full employment achieving a full employment, non-inflationaryoutput. non-inflationary level of output.

Discount Rate  1. Discount Rate – when banks borrow from the Fed. Reserve Ratio  2. Reserve Ratio – how much of demand deposits that have to be kept in reserve and can’t be loaned out. Buyingrecession gapselling inflation gapsecurities  3. Buying [recession gap] and selling [inflation gap] of securities.

Expansion

Effectiveness of Monetary Policy Strengths of Monetary Policy Speed and flexibility 1. Speed and flexibility –can quickly be altered (compared to fiscal policy). influence interest rates This can occur on a daily basis and influence interest rates and the MS. Isolation from political pressures 2. Isolation from political pressures – because of the 14 year terms. They can unpopular policiesbest for our economy’s health enact unpopular policies which might be best for our economy’s health.

$107,000 to study the sex life of the Japanese quail. $1.2 million to study the breeding habits of the woodchuck. $150,000 to study the Hatfield- McCoy feud. $84,000 to find out why people fall in love. $1 million to study why people don't ride bikes to work. Some of the MOST ABSURD PORK

 $19 million to examine gas emissions from cow flatulence.  $144,000 to see if pigeons follow human economic laws.  Funds to study the cause of rudeness on tennis courts and examine smiling patterns in bowling alleys.  $219,000 to teach college students how to watch television.  $2 million to construct an ancient Hawaiian canoe.

$20 million for a demonstration project to build wooden bridges. $160,000 to study if you can hex an opponent by drawing an X on his chest. $800,000 for a restroom on Mt. McKinley. $100,000 to study how to avoid falling spacecraft. $16,000 study of the komungo, a Korean instrument.

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