Chapter 2 Unit 3 Fiscal Policy

FISCAL is derived from Latin Term FISCALIS is from FISCUS whic

Budget is a tool of Ecnomic Policy

Receipts Payments Macroeconomic

Income or Public Public Expenditure
revnue
Fiscal Policy is Laws made by a Govt/Legislative branch to effect
Can we say the Fiscal policy of all countries Uniform?
NO , it differs from country to country due to different ec
ie Capitalism, Socialism and Mixed Economy
But Common Objectives of all Countries will be mor or less sam
1) achievement and maintenance of full em
2) Maintenance of Price Stability
3) Acceleration of rate of Economic Develo
4) Eqiutable distribution of Income and We
Basic Fiscal Policies ?
1) Discretionary Fiscal Policy
2) Non-discretionary Fiscal Policy or " Automa

GDP= AD=C+I+G+NX

C-Consumption
I- Investment
G- Government Purchase of Goods and Servic
NX-Net Exports( Exports- Imports)

Instruments of Fiscal Policy

Taxes Govt. Public Debt

Expenditure
om FISCUS which means Basket -Money Purse _ Treasury

Macroeconomic Perspective

e branch to effect Spending and Taxes.

ue to different economic policies

mor or less same:

tenance of full employment
tability
Economic Development
of Income and Wealth

olicy or " Automatic Stabilizer"

Goods and Services-" Govt Expenditure"

Fiscal Policy

Govt.
Budget