Overview
Fiscal policy plays a crucial role in managing economic activity, especially during periods of recovery from downturns. By adjusting government spending and taxation, policymakers can stimulate growth, reduce unemployment, and stabilize prices. Understanding the tools and implications of fiscal poli...
Key Terms
Example: Increasing spending during a recession is a fiscal policy action.
Example: Building infrastructure is a form of government spending.
Example: Income tax is a common form of taxation.
Example: Tax rebates can serve as an economic stimulus.
Example: A budget deficit occurs when a government spends more than it earns.
Example: A $1 million investment can lead to a $2 million increase in economic activity.
Related Topics
Key Concepts
Government SpendingTaxationEconomic StimulusBudget Deficit