The Story of Fiscal Policy
Monetary and fiscal policy changes have a ripple effect within the economy. Each of the following excerpts tells one part of the “story” of how fiscal policy impacts those within the economy. Number each part of the story (1-7) according to what would happen in sequence.
Story 1
A stay at home husband is delighted to receive the tax-rebate check. He spends the money by putting it toward the down payment on a new car his wife desperately needs to get to work.

A restaurant owner discusses how business at the restaurant has increased. The increased revenue, along with the tax cut to businesses, provides the incentive she needed to expand the business. She decides to build 3 more stores.

A car salesman notices that car sales have picked up, and he, along with all the other car salesman he knows, have enjoyed a pay increase as a result. He will use the increased income to buy a new computer for the home.

The President announces that the tax cut to households and businesses he has been promising was approved by the House and Senate and will be put into effect immediately via tax-rebate checks

A computer store manager sees that computer sales have increased recently and the store has been busier. She needs to hire more workers to handle the additional consumer demand.

An unemployed computer technician gets hired at the computer store and is happy to be working again. He celebrates his re-entrance into the workforce by taking his family out to dinner

A laid-off construction worker gets called back to work to build a new restaurant. After working for several months, he is able to save enough to take a trip to Hawaii.