The policy of a government in controlling its own expenditures and taxation, which together make up the budget.
Note: A function of fiscal policy, along with monetary policy, is to regulate the level of economic activity, the price level, and the balance of payments. Fiscal policy also determines the distribution of resources between the public sector and the private sector and influences the distribution of wealth.
Fiscal Policy
Government spending policies that influence macroeconomic conditions. These policies affect tax rates, interest rates, and government spending, in an effort to control the economy.
Investopedia Commentary
Since the 1980s, most Western Countries have held a "tight" policy, limiting public expenditure.
Related Links
What Is Fiscal Policy?
The Federal Reserve (the Fed) Tutorial
Economics Basics Tutorial
Trying To Predict Interest Rates
Forces Behind Interest Rates
The Impact of Interest Rates on Real Estate Investment Trusts
See also: Income Tax, Interest Rates, Monetary Policy, Reflation
fiscal policy