Abstract This paper will explain the effects of the changes in fiscal policy as a result of the Evaluating Fiscal Policy simulation. This paper will explain what happened in the simulation as the spending and income tax rates were raised and lowered. This paper will also explain how inflation, unemployment, and popularity were effected by at least three different configurations of spending and taxation. Additionally, this paper will explain what fiscal policies need to be in place to balance the ideals of lower inflation, lower unemployment, and increased popularity. The federal budget consists of a yearly report of the expenditures, tax receipts, and excess or shortfall of the United States government. The purposes of the federal budget are to finance the federal government and to stabilize the economy. Fiscal policy can be either discretionary or automatic. Changes in government purchases and changes in taxes have multiplier effects on aggregate demand and can be used to try to keep real GDP at potential GDP. In practice, law-making lags, the difficulty of estima......

Word Count: 832
Page Count: 3.3 (250 words a page / double spaced)

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