Question

FISCAL POLICY IMPACT

I am looking for information from the 1950's-1960. This is for a discussion so it can be a short response.

After looking at what the government set out to do and why, you will now examine if it actually worked.

•You will look at the macroeconomic data (which you already gathered in milestone one) to see if policy actions achieved their goals. For instance, if President Johnson's "War on Poverty" aimed to reduce poverty in the U.S. and, in doing so, create a stronger economy. With less poverty, we should see increased consumption and higher growth rates.

•Keep in mind that there may be times when the government misread the economy and implemented a policy that had unintended effects so its important to compare what was observed after the policy in the macroeconomic data to what the policy objectives were.

•Also, consider how individual households and businesses were impacted by the policy decisions. For example, if taxes were lowered, did people spend more money? Did they save more money? Which group(s) of people received the tax cut?

Answer 1

Fiscal policy is the use of government spending and taxation to influence the economy

Fiscal policy is said to be tight or contraction when  

Revenue is higher than spending it means surplus budget .

Fiscal policy is said to be loose or expansion when spending is higher than revenue it means deficit budget

If government cuts taxes or increases transfer payments ( pension,subsidise),household disposable income will roses and they will spend more on consumption hence due rise in income ,consumption also rise and vice versa