Fiscal policy is the use of Government taxes and public expenditures to regulate public spending levels of the economy.The aforementioned didactic reasons used in the economy falling into recession and unemployment, increased government spending and tax breaks will cause increased production and employment levels can fully recover. Conversely, when the economy is thriving too inflation rising, the Government can reduce spending and raise taxes, thereby degrading overall spending level, output decreases and inflation slowed.However in reality, fiscal policy does not have enough power so when the economy is unstable, the business cycle has not yet been overcome completely.
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