Fiscal policy involves government spending and taxation from "summary" of Economics of Money, Banking and Financial Markets, Business School by Frederic S. Mishkin
Fiscal policy is a crucial tool that governments use to influence the economy. It involves making decisions about government spending and taxation with the goal of achieving specific economic objectives. By adjusting these two key components, policymakers can have a significant impact on the overall health of the economy. Government spending refers to the amount of money that the government allocates to various programs and projects. This spending can include investments in infrastructure, education, healthcare, defense, and social welfare programs. By increasing or decreasing government spending, policymakers can directly stimulate or slow down economic activity. Taxation, on the other hand, involves the government collecting revenue from individuals and businesses to fund its operations and programs. Taxes can be levied on income, consumption, wealth, and other economic activities. By adju...
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