Overview
Fiscal policy is a crucial tool used by governments to influence economic activity through spending and taxation. By adjusting these levers, governments aim to stabilize the economy, promote growth, and reduce unemployment. Understanding fiscal policy effectiveness is essential for evaluating how we...
Key Terms
Example: Increasing taxes to reduce inflation.
Example: Funding for public schools.
Example: Income tax collected from workers.
Example: A $1 million investment can lead to a $2 million increase in GDP.
Example: Using fiscal policy to combat recession.
Example: National defense.