After reading this chapter, you should be able to

16.1 Describe discretionary fiscal policy.

16.2 Explain fiscal policy in the framework of the aggregate supply and demand model.

16.3 Describe the multiplier effect.

16.4 Explain the supply side effects of fiscal policy.

16.5 Describe the possible obstacles to effective fiscal policy.

16.6 Explain how automatic stabilizers work.

16.7 Discuss the burden of the national debt.