What This Document Is
This is a focused worksheet designed for students enrolled in an upper-level macroeconomics course (ECON 98) at the University of California, Berkeley. Specifically, it centers on the application of fiscal policy principles to analyze and influence economic output. The worksheet provides a structured framework for applying macroeconomic models to real-world-style policy scenarios. It requires students to work through calculations and propose policy interventions based on a defined economic context.
Why This Document Matters
This resource is invaluable for students aiming to solidify their understanding of how government spending and taxation impact aggregate demand and national income. It’s particularly helpful for those preparing for exams or projects that require applying theoretical knowledge to practical economic challenges. Students who are actively learning about Keynesian economics and the multiplier effect will find this worksheet especially beneficial. It’s best used as a practice tool *after* initial exposure to the core concepts of fiscal policy.
Topics Covered
* Equilibrium GDP Calculation
* Keynesian Cross Model & Graphical Analysis
* Government Spending Multiplier
* Tax Multiplier
* Budget Balancing & its Economic Effects
* Fiscal Policy Recommendations for Achieving Full Employment
* Impact of Fiscal Policy on Aggregate Output
What This Document Provides
* A defined economic scenario with specific parameters (consumption function, investment, government spending, net taxes).
* A series of targeted questions requiring quantitative analysis and policy proposals.
* A framework for analyzing the effects of changes in government spending and taxation.
* Opportunities to apply graphical representations (specifically the Keynesian-cross) to illustrate economic concepts.
* A structured approach to evaluating the trade-offs involved in different fiscal policy choices.