1. -How a government taxes and spends money
Fiscal Policy
-How a government taxes and spends money

2. Government Spending -Government Increases Spending
-Keynesian Economics
-Effect on the Economy
-Government Decreases Spending

3. Taxation -Government Increases Taxes -Effect on the Economy
-Government Decreases Taxes
-Supply Side or Trickle Down Economics

4. Monetary Policy
-How the government regulates the amount of money in circulation
-Regulated through the Federal Reserve System
-The supply of money can be described as tight monetary policy or easy monetary policy according to the actions of the government

5. Interest Rates
-Gov’t controls a basic interest charge that is called the discount rate---which is used by banks
-Raising Interest Rates (tight monetary policy)
-Lowering Interest Rates (easy monetary policy)

6. Reserve Requirements
-Reserve Requirements are the amounts of money the gov’t requires banks to keep as deposits
-Raising Reserve Requirements
-Lowering Reserve Requirements

7. US Savings Bonds -Government BUYS Bonds back from Consumers
-Government SELLS Bonds to Consumers