Fiscal Policies Ngog Nliba Nguimbous.

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Presentation transcript:

Fiscal Policies Ngog Nliba Nguimbous

Outline Define Fiscal Policies Types of Fiscal policies How these policies are applied Tools of Fiscal Policies Outline

What Are Fiscal Policies? Any spending intentionally done by the government or taxation initiative that influences the Economy The goal is to promote good economic growth What Are Fiscal Policies?

Types of Fiscal Policies Expansionary Fiscal policies Contractionary Fiscal Policies Types of Fiscal Policies

Expansionary Fiscal Policies This form of fiscal polices in used when: The economy is in recession The economy in the contraction phase of the business cycle (recession) The goal is to come out of a recession

How to apply an Expansionary Fiscal Policy? The Federal Government can: Spend more money Cut taxes The goal is to put money into consumer hands to promote spending and economic activities This is will stimulate demand which will then get businesses running and generate jobs How to apply an Expansionary Fiscal Policy?

Contractionary Fiscal Policies Used to slow down the economy in order to stop inflation. “ This is rarely used” Long-term inflation can be detrimental to standard of living and the value of money.

How to apply contractionary fiscal policies The Federal Government can: Increase taxes Cut spending The idea is to reduce the amount of money in the consumers hands How to apply contractionary fiscal policies

Tools of Fiscal Policies Taxation includes: Income, property, sales, Government spending includes: Subsidies, welfare programs, public work projects Tools of Fiscal Policies

Questions What action should the Federal Government take when the economy is in a recession? What Actions should the Federal Government take when the economy could face possible inflation?

Sources https://www.thebalance.com/what-is-fiscal-policy-types- objectives-and-tools-3305844