Expansionary fiscal policy is when the government expands the money supply in the economy using budgetary tools to either increase spending or cut taxes—both of which provide consumers and businesses with more money to spend. In the United
DEFINITION Fiscal policy refers to decisions the government makes about spending and collecting taxes and how these policy changes influence the economy. When the government makes fiscal policy decisions, it has
Definition and Examples of the Unemployment Rate The U.S. unemployment rate by year shows the percentage of people in the U.S. population who are unemployed in a given year. The U.S. Bureau
The U-6 real unemployment rate includes the underemployed, the marginally attached, and discouraged workers. It’s usually much higher than the U-3 unemployment rate, which is the rate most often reported in the media. The Bureau of Labor
Definition and Examples of the Natural Rate of Unemployment The natural unemployment rate is the lowest level sustainable without creating inflation. In a healthy economy, workers are always coming and going,
An economic depression is a severe downturn that lasts several years. Fortunately, the world has only experienced one economic depression. That was the Great Depression which lasted for 10 years. The decline in the gross domestic
Definition and Examples of Middle-Class Income Although the U.S. government doesn’t have an official definition of middle-class income, the Pew Research Center considers a household to have “middle-income” if it’s between 67%
How Does Economic Growth Work? Economic growth is the increase in the value of an economy’s goods and services, which creates more profit for businesses. As a result, stock prices
Trickle-down economics is a theory that claims that benefits for the wealthy trickle down to everyone else. These benefits are tax cuts on businesses, high-income earners, capital gains, and dividends. Trickle-down economics assumes that
Have you ever said to yourself, “How exactly does the U.S. economy work?” During a recession, you might think, “Not too well!” Learn the causes of recession by understanding gross domestic product and the laws
