Understanding fiscal policy from "summary" of Oswaal NCERT One For All for UPSC & State PSC's Indian Economy Classes-9 to 12 (Old & New NCERT Edition) (For 2023 Exam) by Oswaal Editorial Board
Fiscal policy refers to the government's use of taxation and spending to influence the economy. It is a crucial tool that governments use to achieve various economic objectives. By understanding fiscal policy, one can comprehend how governments make decisions that impact the overall economic health of a country. Governments use fiscal policy to achieve macroeconomic objectives such as economic growth, price stability, and full employment. For example, during a period of economic slowdown, the government may increase government spending or cut taxes to stimulate economic activity. On the other hand, during a period of high inflation, the government may reduce spending or increase taxes to cool down the economy. Fiscal policy can be expans...
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