Fiscal Policy Flashcards
1
Q
What is fiscal policy?
A
The manipulation of government spending and taxation to influence aggregate demand.
2
Q
What is a disadvantage of fiscal policy?
A
It is very difficult to calculate.
3
Q
What is expansionary fiscal policy?
A
Increasing government spending & decreasing taxation.
4
Q
What is the opposite of expansionary fiscal policy known as?
A
Retrenchment.
