Posted by: Labdhi Mehta on Jan 07, 2019, 06.30 AM IST
refers to the policies of the
regarding its expenditure, investment
2. The objective is to find a balance between tax rates and public spending to ensure a healthy economic growth without causing inflation to rise.
expansion aims to stimulate aggregate demand and growth through reducing
and/or increasing government spending.
4. A contraction in fiscal policy decreases government spending and/or increases taxation to reduce aggregate demand and output.
5. Fiscal policies tend to impact demand directly and quickly as compared to monetary policies which have a lagged and uncertain impact.
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