Fiscal Policy

Fiscal policy is a tool used by governments to influence economic conditions via spending and tax policy. Fiscal policies are implemented to influence demand for goods or services, employment, inflation or economic expansion.

A government can implement fiscal policy in the form of lower tax rates in order to influence higher levels of consumer spending. It could also promote economic expansion by building infrastructure such as public transportation or highways that will allow individuals and businesses higher levels of connectivity and ability to expand productivity.

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