Question

Define fiscal policy. What are the instruments and objectives of fiscal policy ? Clarify.

Answer 1

Answer:

It means by which a govt adjusts its spending levels and tax rate to monitor and influence a nations economy. It is the sister strategy to monetary policy through with centralbank infulence a nations money supply

Answer 2

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The tools of fiscal policy are taxes, expenditure, public debt and a nation's budget. During inflation, fiscal policy aims at controlling excessive aggregate spending, while during depression it aims at making up the deficiency in effective demand for raising the economy from the depths of depression.