In economics and political science, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure. Changes in the level and composition of taxation and government spending can affect the following variables in the economy:
- Aggregate demand and the level of economic activity;
- The pattern of resource allocation;
- The distribution of income.
Fiscal policy refers to the use of the government budget to influence economic activity.
Read more about Fiscal Policy: Stances of Fiscal Policy, Economic Effects of Fiscal Policy, Fiscal Straitjacket
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“The horror of Gandhi’s murder lies not in the political motives behind it or in its consequences for Indian policy or for the future of non-violence; the horror lies simply in the fact that any man could look into the face of this extraordinary person and deliberately pull a trigger.”
—Mary McCarthy (1912–1989)