Question

describe the fiscal policy of the United States Governement.

Answer 1

Fiscal policy is what the government uses to control and stabilize the economy, making use of taxation and spending to do this. Fiscal policy seeks to nudge the economy in various directions by either expansionary or contractionary policy, which aims to either boost economic growth by taxes and investment, or reduce economic growth, respectively, to curb inflation. In fact, fiscal policy intercedes in the economic cycle by counteracting problems in an effort to build a sustainable economy, and uses two instruments-taxes and expenditure-to do this.

Fiscal policy's key objectives are to achieve and sustain full employment, achieve a high rate of economic growth and stabilize prices and wages. However, fiscal policy is also being used to combat inflation, raise aggregate demand and other macroeconomic issues. In expansionary fiscal policy (which is the most common approach used), the government imposes policies that can boost or lower taxes, spend money on programs to stimulate the economy, increase jobs, or increase economic efficiency.

One way the government uses monetary policy is to stimulate the economy if it decides that market performance is lagging-and spends more on stimulating the economy (called spending on "stimulus"). However, if the government doesn't have enough cash to finance its own spending, it also borrows money in the form of selling government bonds (or treasury bonds)-debt securities-and then invests the funds under that debt. That is sometimes referred to as "deficit" spending, which is one of the government's main forms of using monetary policy.