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Taxes, and government spending. Increasing taxes will decrease consumption and supply. Lowering taxes will increase consumption and supply. Increasing government spending will increase national consumption, and decreasing government spending will decrease national consumption. The economics AD-AS model shows a visual representation of the effects of fiscal policy on the economy if you are further interested.

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Q: How is fiscal policy controlled?
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Related questions

Who administers Fiscal Policy?

The fiscal policy, which is, controlling the level of taxes and government spending, is left to the government. On the other hand, the monetary policy, that is, the tools fr controlling money supply in the economy, is controlled by the central bank.


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Fiscal policy is a policy centered on ideas and research.


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The president and congress together control the fiscal policy.


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Fiscal Policy involves taxes and spending. It is used (ofen incorrectly) to try to manage the business cycle. It is controlled by congress and the president Monetary policy involves managing the money supply and interest rates. It has proven much more useful in managing inflation and reces fiscal policy also helps in giving such more information about the government expenditure and government policies about the current expenditure


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The limits to fiscal policy are difficulty of changing spending levels, predicting the future, delayed results, political pressures and coordinating fiscal policy.


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