In the face of unstable economic growth due to a recession or accelerating inflation, potential problems with large public debt include higher income inequality, reduced economic incentives, and crowding out of private investment.

1. Explain fiscal policy, its function and its effects on short and long-term economic fluctuations using the aggregate demand and supply model presented in the course.
2. Explain each of the tools that exist in expansionary fiscal policy and contractionary fiscal policy.
3. Explain the effects of expansionary and contractionary fiscal policy on income and the price level.
4. Using the premise presented as a basis, he argues about the intervention of fiscal policy as an instrument to promote growth, sustainability and economic stability in a country. (Offers an example).