Fiscal Policy Flashcards
1
Q
What is reflationary fiscal policy
A
Increased AD - it involved increasing government spending and lowering taxes.
2
Q
What is deflationary fiscal policy?
A
Reduces AD - by reducing government spending and raising taxes
3
Q
Is Fiscal Policy easy to use?
A
Gov spending takes a long time to organise and information about the economy can be imperfect
4
Q
What is Fiscal policy?
A
Fiscal policy is all to do with government spending and taxation - usually used to influence AD
In recession there’ll try to boost demand - and reduce the demand when the economy is booming
