fiscal policy

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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.

Use 'fiscal policy' in a Sentence

Some constituents in our country disagree with our president's fiscal policy, and they say that he spends too much of their money.
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If the funding goals for the upcoming budget are to be reached, this fiscal policy will need a serious overhaul.
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The company instituted a new fiscal policy which required all employees to provide receipts for their travel-related expenses so the company could monitor spending.
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