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What is the current U.S. Fiscal Policy – is it expansionary or contractionary? If the current GDP has declined or expanded over the past 2 quarters at least, which of the tools of fiscal policy would you use to try to rein in the economy and how is this tool expected to affect Aggregate Demand? Give some examples of past U.S. fiscal policies and comment on their effectiveness. If you were in charge of making changes to U.S. fiscal policy, what changes will you make given the current economic conditions? What are some limitations of fiscal policy? Discuss some other goals besides economic stability that the government may have that would thwart fiscal policy.
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