Question

Role of government fiscal policy in economic development

Answer 1

Role of government fiscal policy in economic development:

Fiscal Policy can be defined as an adjustment made by the government on its spending limits as well as tax rates to monitor economic development. The role of government can be brought up during the time when the economy is either slowing down or moving fast.

For example, if the economy is slowing down or let’s say that due to unemployment, public spending has been lowered, so to rise the economy the government will decrease the taxes to bring motivation among the people and vice-a-versa for when the economy is moving fast, the government will increase the rate of taxes to cool down the public spending's.