expression

fiscal policy

government use of taxes and spending to steer the economy

In Banking & Finance

In more detail

the use of government spending and taxes to manage the economy and influence economic growth

Examples

The government's fiscal policy aims to reduce inflation by raising taxes and cutting spending.
Expansionary fiscal policy increases government spending to stimulate economic growth during a recession.

How to use fiscal policy

Fiscal policy refers to the deliberate manipulation of government revenues and expenditures to achieve economic objectives such as reducing unemployment or controlling inflation. It is typically contrasted with monetary policy, which operates through the central bank's control of money supply and interest rates. The term is used in economic and political contexts when discussing government economic management.

Common phrases

implement fiscal policy
fiscal policy stimulus
expansionary fiscal policy
contractionary fiscal policy
fiscal policy measures

Synonyms

budgetary policy · government spending policy · tax and spending policy

Opposites

monetary policy

Word family

fiscal (adjective)

A common mistake

Learners often confuse fiscal policy with monetary policy; fiscal policy involves government budgets and taxes, while monetary policy involves central banks and interest rates.

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