Friday, April 25, 2008

Unit 3: Fiscal policy in action in the USA

These BBC reports show the use of fiscal policy in the USA

http://news.bbc.co.uk/1/hi/business/7367995.stm

http://news.bbc.co.uk/1/hi/business/7371755.stm

a) Why is this an example of fiscal policy?
b) Why are Americans receiving these tax rebates?
c) Using an AD/AS diagram, explain the expected effect on the US economy and the 4 macroeconomic objectives
d) Explain why this may not be the actual outcome

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