Description                                  
Marge, a typical entrepreneur, has many worries. She is concerned about her Ostrich burger business, about the state of the economy in general, about the amount of taxes she pays, and about how the government chooses to spend those tax dollars. 
The narrator defines fiscal policy in terms of the government's use of the federal tax system. 

Customer: 
(Approaches the counter...) 

Marge: 
Can I help you? 

Customer: 
Yeah... I'm down to my last dollar. Can I get a burger for that price? 

Marge: 
I'm sorry... our cheapest burger is $2.00. 

Customer: 
(Sighs... turns and leaves disgruntled) 

Marge: 
Business is terrible these days. I finally had to face the facts and lay off some of my employees. I can barely afford to keep my cook. I really don't know how long I can stay in business unless people start buying more burgers. 

Marge: 
It's a good thing the federal government started that big highway project just across town. That should pump a lot of money into the local economy. It's about time they do something constructive with our tax dollars. But, I still think we'd all be better off if they cut taxes. 

Narrator: 
Since Marge is a business owner feeling the pinch of an economic recession, she would be very happy if the government cut taxes. Her firm, along with thousands of other firms, pays taxes to the government in exchange for certain goods and services. And like millions of other household breadwinners, she pays taxes to the government on the income she brings home. 

Narrator: 
The government uses revenue from taxes to provide public goods and services, such as roads and highways, which are vital to the economy. The government's use of taxes and purchases to influence aggregate economic activity is known as fiscal policy. 

--End--           Back