Note: This is post #125 in a weekly video series on basic economics.
When and why does the government might engage in expansionary fiscal policy? When does the government increase spending, or decrease taxes, to combat a recession?
In this video by Marginal Revolution University, Tyler Cowen examines some of the government’s options, from doing nothing to taking steps to increase the velocity of money and thereby increase aggregate demand.
(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.)
Click here to see other videos in the Introduction to Economics series.