11 Fiscal Policy AQA AS Economics (new spec) MACRO

This is one of a set of Powerpoints (and accompanying Notes/Key Terms sheets) that I have created for my own teaching of the macroeconomic topics in the new (linear) AQA AS Economics specification (7135). They follow the order of teaching recommended by the exam board and (generally) the AQA-approved textbook (Powell & Powell, 2015).

Key terms covered in this Powerpoint: (references to the specification):

3.2.4.2 Fiscal policy
• Fiscal policy involves the manipulation of government spending, taxation and the budget balance.
• Fiscal policy can have both macroeconomic and microeconomic functions.
• How fiscal policy can be used to influence aggregate demand.
• How fiscal policy can be used to influence aggregate supply.
• How government spending and taxation can affect the pattern of economic activity.
• The relationship between the budget balance and the national debt.
• Students should appreciate that governments may deliberately run budget deficits and surpluses to try to influence aggregate demand but they are not required to understand the arguments relating to the pros and cons of balancing the budget or attempting to limit the size of the national debt.