2.6.2. Fiscal Policy and Aggregate Supply (Edexcel A-Level Economics Teaching PowerPoint)

This Edexcel teaching powerpoint covers Fiscal Policy and Aggregate Supply

Fiscal policy can play a major role in long-term economic growth by:

• Promoting investment: Fiscal policy can encourage investment in infrastructure, education, and research and development, which can lead to a more productive economy in the long run.
• Encouraging business activity: Tax incentives and other policies can encourage businesses to expand, invest, and hire more workers, leading to economic growth.
• Addressing inequality: Fiscal policy can be used to redistribute income and wealth, which can help reduce inequality and create more equitable economic opportunities for everyone.
• Maintaining stability: Fiscal policy can be used to stabilise the economy during times of recession or inflation, helping to maintain economic growth in the long run.

Fiscal policy can also be used to improve a country's infrastructure:

• Direct investment: The government can directly fund infrastructure projects through grants or loans, which can lead to new roads, bridges, and other infrastructure that improves transportation, communication, and trade.
• Tax incentives: Tax incentives can encourage businesses to invest in infrastructure, such as through tax credits for investment in renewable energy, or deductions for research and development.
• Public-private partnerships: The government can work with private companies to develop and finance infrastructure projects, which can lead to faster and more efficient infrastructure development.
• Bonds: The government can issue bonds to finance infrastructure projects, which can provide a source of funding that doesn't rely on tax revenue.