The discussion focuses on “Fiscal Policy”.

It also includes the Importance of Fiscal

Policy, Difference of Fiscal Policy in Monetary Policy, Two Types of Fiscal Policy,
Proposed 2020 Philippines Budget and Sources of philippines Budget.

Fiscal policy is the means by which a government adjusts its spending levels and tax
rates to monitor and influence a nation's economy. It is the sister strategy to monetary
policy through which a central bank influences a nation's money supply.
Fiscal policy is an important tool for managing the economy because of its ability to
affect the total amount of output produced—that is, gross domestic product. The first
impact of a fiscal expansion is to raise the demand for goods and services. This greater
demand leads to increases in both output and prices
Monetary policy involves changing the interest rate and influencing the money supply.
Fiscal policy involves the government changing tax rates and levels of government
spending to influence aggregate demand in the economy.
There are two main types of fiscal policy expansionary and contractionary.
Expansionary fiscal policy, designed to stimulate the economy, is most often used
during a recession, times of high unemployment or other low periods of the business
cycle. It entails the government spending more money, lowering taxes or both. The
goal is to put more money in the hands of consumers so they spend more and
stimulate the economy. Contractionary fiscal policy is used to slow economic growth,
such as when inflation is growing too rapidly. The opposite of expansionary fiscal
policy, contractionary fiscal policy raises taxes and cuts spending.
The proposed 2020 budget for 2020 if 4.1 trillion pesos. The national budget proposed
by the administration of President Rodrigo Duterte.
Sources of philippines budget are, taxes, tevenue from businesses that the goverment
own, selling of properties and loans.

After the discussion above i have realize that Fiscal Policy has a major role in the
economy that fiscal policy can reduce the level of unemployment in the economy by
using expansionary fiscal policies. It involves increasing government spending and
real income through reduced taxes. When taxes are reduced, consumption increases
leading to an increase in the demand for supplies. This leads to an increase in
production and creates opportunities for employment.
The policy can be used to decrease the amount of budget deficit by implementing a
contractionary fiscal policy. The government can impose taxes on individuals which
will increase revenues and help in reducing the deficit.
It can also increase the level of economic growth and efficiency by implementing
suitable policies for the economy, after evaluating all the economic and business
fluctuations.