Question

Define fiscal policy and explain how it works through multiplayer process.

Answer 1

Answer : A policy that influence changes in a government expenditure and taxes that are designed to influence or achive macro economic policy , growth ,employment, inflation control etc.

Fiscal policy plays a multipurpose role such as :

• It has been also used as to influence change pattern of spending of goods and services.
• It has been used for redistribution of income and wealth can be achieved.
• It is an instrument of micro Economic policy.
• It is also used as Federal budget to achieve macro economic policy.
• It is an indicator of the level of overall borrowings by the government.
• Government affected the Economy activity.
• To generate revenue and to incurred long term expenditure.