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Fiscal Policy in the Government

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How does the government establish a fiscal policy for the country? What are some advantages and limitations?

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The expert examines the fiscal policy in the government.

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The term fiscal policy refers to the expenditure a government undertakes to provide goods and services and to the way in which the government finances these expenditures. Both the federal and provincial governments conduct fiscal policy. The government tends to increase spending or cut taxes to increase GDP. Both the level of spending and taxation affect GDP on the short run through their influence on the demand for goods and service sin the economy. These are the two main issues for the government when formulating a fiscal policy. The Constitution delineates areas of responsibility for the two ...

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