10 Facts about Fiscal Policy

Facts about Fiscal Policy tell you about an important topic in the fiscal policy and economics. The economy of a country is mainly affected by the government revenue collection and expenditure. The economic activity as well as the demand is affected by the changes of government and taxation based on Keynesian economics. During the business cycle, the economy will be stabilized by the government by implementing fiscal policy. Let us get other interesting facts about fiscal policy.

Facts about Fiscal Policy 1: the macroeconomic variables

The income distribution, investment, savings, aggregate demand, and level of economic activity are some macroeconomic variables, which can be affected by the government spending as well as the taxation.

Fiscal Policy

Fiscal Policy

Facts about Fiscal Policy 2: monetary policy

If you think that monetary policy and fiscal policy are the same, you are wrong. Both are different. A central bank will administer the monetary policy. It is often affected by the interest rates, lending taxes and money supply.

Facts about Fiscal Policy 3: fiscal policy

The executive will administer the fiscal policy under the legislative law. It focuses on the government spending and taxation.

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Facts about Fiscal Policy

Facts about Fiscal Policy

Facts about Fiscal Policy 4: the main issues of fiscal policy

Do you know the main issues of fiscal policy? They include the contractionary fiscal policy, expansionary fiscal policy and neutral policy. The latter one is implemented during the equilibrium of economy. The former one takes place when the tax revenue is larger than the spending. Therefore, the government will be capable to pay debt.

Facts about Fiscal Policy 5: government spending

The government spending is centered on various programs such as for welfare benefits, healthcare, education, police and military.

Facts about Fiscal Policy 6: how to generate fund

The government can generate the fund in a number of ways such as by using the fiscal reserves, borrowing money from abroad, selling fixed assets, collecting taxes and using the benefit from printing money.

Facts about Fiscal Policy 7: the public debt

The public debt is a term to call a condition where the government borrows money from the public.

Fiscal Policy Facts

Fiscal Policy Facts

Facts about Fiscal Policy 8: a fiscal surplus

When a government has a fiscal surplus, there is no need to end up in debt again. The surplus will be kept for the future.

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Facts about Fiscal Policy 9: the possibility

The government may increase expenditure by having fiscal surplus.

Fiscal Policy

Fiscal Policy

Facts about Fiscal Policy 10: the importance of fiscal policy

Fiscal policy is very important for it affects the economic growth, full employment and price stability.

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