1. Increase economic growth, creates jobs are the goals, the limit is it is difficult to change spending levels.
  2. Fiscal Policy is the government’s use of spending and taxes to make the economy grow faster or slower. It helps regulate the federal budget.
  3. A budget is a set amount and using of money each month or so.
  4. An appropriation bill is a bill that allows a specific amount of spending by the government.
  5. Expansionary Policy is a government financial policy used to encourage economic growth, often through increased spending or tax cuts.
  6. The President proposes the budget to the congress, and then the congress decides whether it is good or not.
  7. If people are entitled to a certain thing then the budget will have to account for that money.


  1. Classical Economics, Keynesian (demand-side) Economics, and Supply-side Economics.
  2. Classical Economics is the idea that free markets will regulate themselves.
  3. If there is a fully employed work staff, then the most products that can be made will be made.
  4. The multiplier effect is the idea that every one dollar change in fiscal policy creates a change greater than one dollar in the national income.
  5. If taxes are low on investments, then the people will want to purchase more of that investment due to the low tax rates.
  6. Keynesian economics are a school of thought that uses demand-side theory as the basis for encouraging economic action while supply-side economics are a school of thought based on the idea that the supply of goods drives the economy.
  7. It helped FDR carry out his expansionary fiscals policies after he was elected.


  1. The government spends more than it collect therefore there is a budget deficit.
  2. A Treasury bill only lasts 26 weeks or less while a Treasury note has a term of 2 to 10 years.
  3. Hyperinflation is another word for very high inflation.
  4. Due to the budget deficit, the federal government may have had to borrow more money from the bondholders to pay what needs to be paid, therefore increasing the National Debt.
  5. PAYGO means “pay as you go”, it is also a budget enforcement act.
  6. The crowding-out effect is the loss of funds for private investment caused by government borrowing.
  7. It cuts down the amount of money available for businesses to invest. Also it involves foreign ownership of the national debt.
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