1. Financing Government
Chapter 16

2. Fiscal and Monetary Policy
Section 4
Fiscal and Monetary Policy

3. Economic Goals U.S. Has largest and most complex economy in the world.
Administrative success often tied to perceptions of economic success
Goals: Full employment, price stability, and economic growth.

4. Fiscal and Monetary Policy
The government uses the power to tax and spend to try and achieve its economic goals.
Federal spending accounts for about 20% of nation’s GDP
More federal spending = more economic activity
Higher taxes = less money consumers can spend
The government also uses its power over the U.S. currency to achieve economic goals.
Money supply and available credit
Fed uses money supply to influence interest rates.