Discuss the effect of fiscal policy on interest rates and investment. Explain the crowding out effect.
Discuss the effect of fiscal policy on inflation.
Discuss the effect of persistent fiscal stimulus on the economy in the long run.
Describe the mechanism of how changes in fiscal policy affect output and prices in the economy.
Reflection: the students should also include a paragraph in the initial response in their own words, using macroeconomic terminology, reflecting on what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life.
REMINDER: use attachments as reference as well as the link below.
https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Fiscal-Policy
