Fiscal Policy

1. Review questions a. Give a brief definition of fiscal policy. What are its economic goals? b. Explain the aspects of expansionary and contractionary fiscal policy. During which phases of the business cycle would each be appropriate?

2. Explain the effect of a cut in taxes of $50 billion on the economy when the economy's marginal propensity to consume is 0.80. How does this fiscal policy differ from an increase in government spending of $50 billion?

can u answer these answer ?