chapter  15
28 Pages

Stabilizing the Market Economy: Fiscal Policy

The federal government's spending and taxing policies have an important impact on the economy's levels o f GDP, income, employment, prices, and rate o f economic growth. These actions are sometimes introduced espe­ cially to smooth out the business cycle, but often the impact is an indirect consequence o f spending and taxing directed to other goals. In either case, because government is so important in our economy, its influence is sig­ nificant.