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Fiscal policy is a macroeconomic policy.
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- Fri Sep 17 2004

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Assessment 4 - Economic Policies and Management
Vivian- Model Farms High School
FISCAL POLICY
1. Definition
Fiscal policy is a macroeconomic policy, refers to the use of the government's annual budget to affect the level of economic activity and the achievement of objectives such as internal and external balance and economic growth. Government manipulation of the level and composition of taxation and government spending has an impact on:
- Aggregate demand and level of economic activity
- The pattern of resource allocation
- Distribution of income
A government budget is the annual statement from the government of its income (mostly taxes) and expenditure (e.g. welfare payments, education), borrowings, plans for the next financial year.
2. Budget Outcome
The budget outcome gives an indication of the overall impact of fiscal policy on the state of economy.
There are 3 possible budget outcomes
I. Fiscal surplus [G














