Fiscal Policy?

Question

Can someone explain (in plain english) what Fiscal Policy is?

Answer 1

Fiscal Policy is an economic term which government policy that attempts to influence the direction of the economy through changes in government taxes, or through some spending (fiscal allowances)

Answer 2

fiscal policy

Definition

Government's revenue (taxation) and spending policy designed to (1) counter economic cycles in order to achieve lower unemployment, (2) achieve low or no inflation, and (3) achieve sustained but controllable economic growth. In a recession, governments stimulate the economy with deficit spending (expenditure exceeds revenue). During period of expansion, they restrain a fast growing economy with higher taxes and aim for a surplus (revenue exceeds expenditure). Fiscal policies are based on the concepts of the UK economist John Maynard Keynes (1883-1946), and work independent of monetary policy which tries to achieve the same objectives by controlling the money supply.