Role of fiscal policy in economic development
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The various tools of fiscal policy such as budget, taxation, public expenditure, public works and public debt can go a long way for maintaining full employment without inflationary and deflationary forces in underdeveloped economies.
Obviously, taxation and public expenditure is a powerful instrument in the hands of public authority which greatly affect the changes in disposal income, consumption and investment.
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Fiscal policy helps to accelerate the rate of economic growth by raising the rate of investment in public as well as private sectors.
Fiscal policy is an important tool for managing the economy because of its ability to affect the total amount of output produced .
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