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Fiscal Policy

Fiscal Policy – Government spending policies that influence macroeconomic conditions, undertaken by the government Manipulation of supply and/or demand by the federal government in an attempt to move the economy in the direction deemed to be most appropriate at that time. Fiscal policy refers to the overall effect of the budget outcome on economic activity. 

Fiscal Policy Instruments:

• Government Purchases (G)

• Transfer Payments (Tr)

• Taxes (T)