Tag: fiscal policy

Fiscal Policy Explained: Government Budgets, Taxes, & Spending

You’ve landed on the right page, because we’re about to demystify Fiscal Policy. While “Fiscal Policy” might sound

You know how your phone has an “airplane mode” to keep things from going haywire? Well, economies have

Fiscal policy refers to the government’s use of changes in taxation and public spending to influence aggregate demand

The average rate of tax (ART) is the total tax paid divided by total income, typically expressed as

The marginal rate of tax is the proportion of additional income paid in tax, expressed as a percentage.

Expansionary fiscal policy involves increasing government spending and/or cutting taxes to stimulate economic growth. Its primary goal is

Contractionary fiscal policy involves measures to slow economic activity and combat inflation, primarily through reducing government spending and/or

Government spending refers to expenditure by the government on the purchase of goods and services using public funds.

A proportional tax system, also known as a flat tax, requires all individuals to pay the same fixed

A regressive tax system is one in which the average tax rate falls as an individual’s income rises,