Fiscal policy shapes business environment from "summary" of Macroeconomics for Business by Lawrence S. Davidson,Andreas Hauskrecht,Jürgen von Hagen
Fiscal policy refers to the government's decisions regarding spending, taxation, and borrowing. These decisions have a significant impact on the overall economy, including the business environment. When the government increases spending or cuts taxes, it can stimulate economic activity and boost consumer demand. This, in turn, can lead to increased sales for businesses and higher profits. Conversely, if the government decides to reduce spending or increase taxes, it can have a dampening effect on the economy. Businesses may see a decrease in consumer spending, leading to lower revenues and potential layoffs. Therefore, fiscal policy plays a critical role in shaping the business environment by influencing aggregate demand and overall econom...
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