Home » Eng Finance » F » Fiscal policy

Fiscal policy

That part of government policy which is concerned with raising revenue through taxation and deciding on the leve! and pattern of expenditure. It is through the leve! and pattern of budgetary surpluses and their means of financing that the government can control the leve! of demand in the economy. There has been a recent revival of criticism of the U.K. government that it has placed too much reliance on budgetary measures for regulating the leve! of activity in the economy, and has given insufficient recognition to the importance of the quantity theory of money.

Reference: The Penguin Dictionary of Economics, 3rd edt.