Economics Mixed Economy Questions
The role of fiscal policy in a mixed economy is to manage government spending and taxation in order to influence the overall level of economic activity and promote stability. It involves the use of government spending and taxation to achieve specific economic objectives, such as controlling inflation, reducing unemployment, and promoting economic growth. Fiscal policy can be expansionary, where government spending is increased and/or taxes are decreased to stimulate economic activity, or contractionary, where government spending is reduced and/or taxes are increased to slow down the economy. Overall, fiscal policy plays a crucial role in balancing the private and public sectors in a mixed economy and ensuring economic stability.