Fiscal Policy

Fiscal policy

Government spending and taxing for the specific purpose of stabilizing the economy.

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fiscal policy

The existing policy the government has for spending and taxing. Fiscal policy directly affects economic variables, such as tax rates, interest rates, and government programs, that influence security prices. See also monetary policy.

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Fiscal Policy

Government policies related to taxes, spending, and interest rates. Fiscal policy is intended positively influence macroeconomic conditions. The primary debate within this field is how active a government should be. Proponents of a tight fiscal policy argue that government acts best when it acts least; they promote low taxes and spending and ideally limit government involvement to the setting of prevailing interest rates. Proponents of a loose government policy believe that government has a larger role in promoting economic well-being. See also: Reaganomics, Keynesian economics.

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Fiscal Policy

What Does Fiscal Policy Mean?

Government spending policies that influence macroeconomic conditions. These policies are used to influence the overall economy by manipulating tax rates, interest rates, and government spending.

Investopedia explains Fiscal Policy

Since the 1980s, most western countries have followed a “tight” policy, limiting public expenditure.

Related Terms:
• Efficient Market Hypothesis—EMH
• Interest Rates
• Macroeconomics
• Microeconomics
• Monetary Policy