Note: This is post #124 in a weekly video series on basic economics.
What is fiscal policy? As economist Tyler Cowen explains, the simple answer is that it’s a government’s policies on taxes, spending, and borrowing. But how it’s practiced is a little more complicated. Fiscal policy can be used in an effort to mitigate fluctuations in the business cycle—to soften the effects of those booms and busts.
(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)
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