Economics Fiscal Policy Questions Medium
Fiscal policy refers to the government's use of taxation and spending to influence the overall economy. It involves the decisions made by the government regarding its revenue collection and expenditure patterns, with the aim of achieving certain economic objectives such as economic growth, price stability, and full employment.
On the other hand, fiscal stimulus is a specific component of fiscal policy that focuses on implementing measures to boost economic activity during times of economic downturn or recession. It involves the deliberate increase in government spending or reduction in taxes to stimulate aggregate demand and encourage economic growth.
In essence, fiscal policy is a broader concept that encompasses various measures taken by the government to manage the economy, while fiscal stimulus is a specific tool or strategy used within fiscal policy to counteract economic downturns and stimulate economic activity.