Question

please provide one real-life example of fiscal policy is from the fiscal year 2019? write a paragprah. Thank you

Answer 1

Fiscal policy:-

Fiscal policy refers to the use of government spending and tax policies to influence economic conditions, including aggregate demand for goods and services, employment, inflation, and economic growth.

The usual goals of both fiscal and monetary policy are to achieve or maintain full employment, to achieve or maintain a high rate of economic growth, and to stabilize prices and wages. The establishment of these ends as proper goals of governmental economic policy and the development of tools with which to achieve them.

Fiscal policy is largely based on the ideas of British economist John Maynard Keynes, according to Keynesians, government taxation and spending can be managed rationally and used to counteract the excesses and deficiencies of private sector consumption and investment spending in order to stabilize the economy.

when an economy is in neither a recession nor an expansion it is called neutral fiscal policy.The amount of government deficit spending (the excess not financed by tax revenue) is roughly the same as it has been on average over time, so no changes to it are occurring that would have an effect on the level of economic activity.

government spending exceeding tax revenue by more than it has tended to, and is usually undertaken during recessions. Examples of expansionary fiscal policy measures include increased government spending on public works (e.g., building schools) and providing the residents of the economy with tax cuts to increase their purchasing power (in order to fix a decrease in the demand).

Real life example offiscal policy from the fiscal year 2019

In an example of fiscal policy,is associated with high levels of consumer spending, a government may institute higher taxes resulting in lower levels of disposable income. Likewise, a government might engage in public spending in order to increase an economy's cash flow during times of recession.

As has been evidenced throughout the use of fiscal policy in America, both the legislative and executive branches of government have control over and are able to implement fiscal policy. And while President Trump's recent tax and budget bill seeks to boost the economy,

In the just-completed fiscal year 2019, revenues as a share of GDP were 16.3 percent, corporate taxes — 1.1 percent of GDP, Spending of 21 percent of GDP

Our current fiscal situation underscores the need for smart, sustainable fiscal policies that ensure retirement security, provide cost‑efficient high‑quality health care, invest in our nation’s future, and rebalance our tax system to address the nation’s long-term fiscal shortfall. Our fiscal policies should promote economic growth and improve the quality of life.