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Fiscal Policy Notes

Institution: University Level

Course: Bachelor of Commerce

Content Category: Lecture Notes

Posted By: evedee

Document Type: PDF

Number of Pages: 10

Price: KES 100
 
    

Views: 491     Downloads: 2

Summary

Summarised and easy to read notes on fiscal policy including the meaning and objectives of fiscal policy, taxation which includes types and characteristics of taxes, pseudo taxes, the importance of taxes, canons/principles of tax, classification of tax, tax shifts and factors that determine it and finally fiscal federalism(devolution)..........
FISCAL POLICY
Fiscal policy is the use of government revenue collection (mainly taxes) and expenditure (spending) to influence the economy. When the government changes the levels of taxation and government spending, it influences aggregate demand and the level of economic activity. Fiscal policy can therefore be used to stabilize the economy over the course of the business cycle.
Government intervention through fiscal policy is essential in the matter of overcoming recession or inflation as well as promoting and accelerating economic growth. For instance during recession, fiscal policy should help in increasing demand. For this purpose the government can increase its expenditure and spend more on public works. This will provide employment to more people.
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