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Fiscal policy is used by governments to influence the level of aggregate demand in the economy, in an effort to achieve economic objectives of price stability, full employment and economic growth.

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The economic policy that manages the business cycle by changing government spending is called .?

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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.


What are the limits to fiscal policy?

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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Features and effectiveness of fiscal policy?

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What isn't true about fiscal policy?

Fiscal policy does not involve the manipulation of interest rates; that is the domain of monetary policy, which is managed by central banks. Additionally, fiscal policy is not solely focused on short-term economic stabilization; it also aims to influence long-term economic growth through government spending and tax policies. Finally, fiscal policy is not universally effective in all economic conditions, as its impact can be limited by factors like consumer confidence and pre-existing debt levels.