[This is part of the series: The Complete Guide To Economics 101.]

What is a rosy scenario policy?

A Rosy Scenario Policy is when the government offers nothing but good economic forecasts.

Sure, some part if it might have to do with controlling expectations – and the fact that expectations can turn into reality.

But what would you do?

Congress, Senators, the President, bureaucrats – can you imagine them all coming out and saying:

Over the next year, the economy will probably shrink by 4-5%, we expect the stock market to go down by 30-50%, and unemployment to go to 8-10%.

They will never say that.

[This is part of the series: The Complete Guide To Economics 101.]

What is a counter-cyclical fiscal policy?

A Counter-cyclical Fiscal Policy is where the government attempts to offset negative changes in aggregate expenditures.

The textbook fiscal policy answer to a slowing economy is to lower taxes and increase government spending.

Asking if fiscal policy even works to begin with – is another story.