Fiscal policy is the government using its tools to influence the welfare of the economy. It does this by either government spending or taxation. It is used when trying to manipulate the macroeconomic welfare of the economy. It can practice expansionary policy in which the government expenditures are greater than the taxes it receives. The government will have a budget deficit. The government can do this by increasing government spending or decreasing taxation, which increases the amount of money to households. It can also practice contractionary policy in which the government expenditures are less than the taxes it receives. The government will have a budget surplus. The government can do this by decreasing government expenditure or increase taxation, which decreases the amount of money to households.
These tools are used when the government or administration feels like it should step in to either decrease economic activity or increase economic activity. It would want to decrease economic activity in order to decrease inflation. It would want to increase economic activity in order to avoid decreasing aggregate demand, or aggregate economic activity by households. These policies essentially force people to work and force businesses to hire. This is the situation the world is currently in, where economic activity, transactions between businesses and households is stagnant. This leads to huge numbers in unemployment causing a gap in aggregate demand (no one is able to buy anything because they don't have a job to afford things), then firms cannot produce more because no one is buying anything. The logic is when all else fails the government needs to step in to spur economic activity in order to avoid a recession or depression.
fiscal policy OBJ. in relation to taxation policy and expenditure policy
The president regulates the fiscal policy of India.
Fiscal policy is how the government taxes and spends money. The objective of fiscal policy is to influence the economic activity of the governmentâ??s country.
The limits to fiscal policy are difficulty of changing spending levels, predicting the future, delayed results, political pressures and coordinating fiscal policy.
One of the major uses of government fiscal policy is to create stability in the economy. To curb inflation would be another use of fiscal policy.
fiscal policy OBJ. in relation to taxation policy and expenditure policy
Fiscal policy is a policy centered on ideas and research.
The president and congress together control the fiscal policy.
The president regulates the fiscal policy of India.
Yes these are same................
fiscal policy
Fiscal policy is how the government taxes and spends money. The objective of fiscal policy is to influence the economic activity of the governmentâ??s country.
The limits to fiscal policy are difficulty of changing spending levels, predicting the future, delayed results, political pressures and coordinating fiscal policy.
One of the major uses of government fiscal policy is to create stability in the economy. To curb inflation would be another use of fiscal policy.
features of fiscal
fiscal policy
A reduction in government spending is consistent with a contractionary fiscal policy.