What is fiscal policy in simple words

Fiscal policy is the use of government spending and taxation to influence the economy. Governments typically use fiscal policy to promote strong and sustainable growth and reduce poverty.

What is fiscal policy example?

Definition and Examples of Fiscal Policy\n\n For example, governments can lower taxes and raise spending to boost the economy if needed; typically, they spend on infrastructure projects that create jobs and income and social programs. Or, if the economy is doing well, a government can reduce spending and increase taxes.

What is fiscal policy * your answer?

Fiscal policy is defined as the policy under which the government uses the instrument of taxation, public spending and public borrowing to achieve various objectives of economic policy. Simply put, it is the policy of government spending and taxation to achieve sustainable growth.

What is fiscal policy also known as?

Fiscal policy is based on the theories of British economist John Maynard Keynes. Also known as Keynesian economics, this theory basically states that governments can influence macroeconomic productivity levels by increasing or decreasing tax levels and public spending.

What are the three main purpose of fiscal policy?

The three major goals of fiscal policy and signs of a healthy economy include inflation rate, full employment and economic growth as measured by the gross domestic product (GDP).