Definition of Fiscal Policy
What does the term "fiscal policy" mean? What is meant by the term "fiscal policy"?
Fiscal policy is the way in which a government will influence the economy through taxation and expenditures.
For instance, a government may choose to cut taxes in order to kickstart an economy.
Or, in another instance, a government may choose to dramatically increase spending (on infrastructure projects, for instance) to help a country through dire economic times. This increase in spending may result in increased deficits.
The ultimate goal is a government is to have an economy that produces manageable inflation, full employment and economic growth. In order to produce these conditions, a government will modify fiscal policy as they see fit. One side may advocate higher spending coupled with higher taxes, while another side may advocate lower spending coupled with lower taxes.
Davemanuel.com Articles That Mention Fiscal Policy:
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