Fiscal Policy

Government policy that attempts to manage the economy by controlling taxing and spending.

• Corporate Taxes

• Fiscal Policy

• Monetary Policy

• Taxes

Fiscal Policy Tools

• Raising and Lowering Interest Rates

• Open Market Operations

• government spending and taxes

• Raising and Lowering Reserve Requirements

An increase in government purchases of goods and services, a decrease in net taxes, or some combination of the two for the purpose of increasing aggregate demand and expanding real output

• contractionary fiscal policy

• Corporate Taxes

• Individual Income Taxes

• expansionary fiscal policy

Fiscal policy used to decrease aggregate demand or supply. Deliberate measures to decrease government expenditures, increase taxes, or both. Appropriate during periods of inflation.

• tax evasion

• contractionary fiscal policy

• expansionary fiscal policy

• tax avoidance

Fiscal policy decisions are generally intended to maintain a healthy economy. Which of the following are not fiscal policy actions?

• Fed raises the interest rates

• social security

• deep ocean drilling

• tax cuts, and deficit spending