Fiscal policy

High school (ages 12+)
People & Society

Name:

Date:

Step 1 · Read the article

Open the article and read it at the level above. Then answer the questions below in your own words.

https://smallwhale.org/articles/fiscal-policy

Write what each word means, using the article.

Do not copy the article. Write two things you learned, the way you would explain them to a friend.

Answers below are taken from the article’s stored facts, so they match what the student read.

1. What is the theoretical underpinnings?Rooted in Keynesian economics, emphasizing government's role in managing aggregate demand
2. How can cutting taxes help the economy?When taxes are lowered, people have more money to spend and businesses can invest more, which makes the economy grow.
3. Why does the government spend money on things like roads and schools?Spending on projects like roads, schools, and help for people creates jobs and makes more goods and services needed, which helps the economy.

Laissez-faire Economics: An economic system where transactions are free from government intervention such as regulation, privileges, tariffs, and subsidies.
Aggregate Demand: The total demand for goods and services in an economy at a given price level and time period.
Natural Rate of Unemployment: The theoretical lowest unemployment rate an economy can sustain without causing inflation.
Business Cycle: The recurring pattern of expansion and contraction in economic activity over time.