Fiscal policy influences government spending and taxation from "summary" of Basic Economics by Thomas Sowell
Fiscal policy is a powerful tool that governments use to steer their economies in a desired direction. This tool involves making decisions about government spending and taxation, which can have significant impacts on the overall economy. By adjusting these two key components, policymakers can influence economic growth, inflation, employment, and other important aspects of the economy. Government spending refers to the money that the government allocates to various programs, projects, and services. When the government increases its spending, it injects more money into the economy, which can stimulate economic activity. For example, increased government spending on infrastructure projects can create jobs, boost demand for goods and services, and spur economic growth. On the other hand, taxation involves the money th...
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