Fiscal Policy
📄 Taxes
Quick Definition
Fiscal policy refers to the government's use of spending and taxation to influence the economy.
Examples
- 1A government increases infrastructure spending to stimulate economic growth during a recession.
- 2A reduction in income tax rates to increase disposable income and boost consumer spending.
- 3Implementing higher taxes on luxury goods to reduce income inequality.
- 4Government grants and subsidies to promote renewable energy sectors.
Tags
governmenteconomytaxationspendingpolicy
Related Terms
Other terms you might find helpful
Budget Deficit
A budget deficit occurs when a government spends more money than it receives in revenue over a specific period, typically a fiscal year.
Economic Growth
Economic growth refers to the increase in the production of economic goods and services, compared from one period of time to another.
Inflation
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
Monetary Policy
Monetary policy refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals.
Quick Info
Category:Taxes
Difficulty:intermediate
Last Updated:6/19/2025