IB Economics 3.6.1: Fiscal Policy (Government Gaps, Strengths & Crowding Out)

How do governments use taxing and spending to manage the economy? In this IB DP Economics Unit 3.6.1 lesson, we explore Fiscal Policy. We break down government revenue sources vs. expenditure types (current, capital, transfers) and master expansionary and contractionary AD-AS diagrams. For HL students, we dive deep into the constraints of crowding out and the mechanics of automatic stabilizers. 00:00 - Intro 00:34 - Explain fiscal policy and distinguish between sources of revenue and expenditures 05:21 - Explain the goals of fiscal policy 09:05 - Explain and evaluate expansionary and contractionary fiscal policies to close inflationary and deflationary / recessionary gaps 11:45 - Discuss constraints on fiscal policy including political pressures, time lags, sustainable debt 14:50 - Discuss strengths of fiscal policy including the ability to target specific sectors, effectiveness of government spending in deep recessions 16:51 - Evaluate fiscal policy with respect to promoting low unemployment, low and stable rate of inflation, and growth 20:45 - (HL) Discuss the constraints of crowding out and draw a diagram illustrating it 23:27 - (HL) Discuss automatic stabilizers: unemployment benefits progressive taxes 🚀 Next Lesson 3.6.2 (HL) Keynesian Multiplier :    • IB Economics 3.6.2: The Keynesian Multipli...   📚 Full IB Economics Unit 3 Playlist:    • Master IB Economics Unit 3: Macroeconomics...   🔔 Subscribe to Kevin Means Business for straight-to-the-point IB Economics lessons!    / @kevinmeansbusiness   #ibeconomics #macroeconomics #fiscalpolicy #governmentspending #ibdp #economicsrevision #KevinMeansBusiness #selfstudy