Fiscal policy is the use of government spending and taxation to influence the economy.  Governments typically use fiscal policy to promote strong and sustainable growth and reduce poverty. The role and objectives of fiscal policy gained prominence during the recent global economic crisis, when governments stepped in to support financial systems, jump-start growth,  and mitigate the impact of the crisis on vulnerable groups. 

a) Explain objectives of fiscal policy that lead to unemployment and inflation. 

b) Distinguish an expansionary fiscal policy and a contractionary fiscal policy that will influence economic growth.

Answer rating: 100% (QA)

a Fiscal policy objectives Some of the key objectives of fiscal policy are economic stability price ... View the full answer