What are the goals of fiscal policy?

National and regional governments often carry out various policies that affect the direction of the economy. While the short -term objectives of fiscal policy may vary, all fiscal policies are powered by government attempts to control economic activities. Some people confuse fiscal policy with monetary policy. Fiscal policies generally relate to government expenditure, loans and tax evaluation, while monetary policy control interest rates and national money supply.

The final objectives of fiscal policy include reducing unemployment and encouragement of economic growth. Monetary policies can also affect the level of growth and unemployment, but fiscal policies are political decisions concerning government budgets and how public funds are used to shape the economy. Fiscal policy objectives for regional government may include a decrease in the number of families that live below the poverty line. The government may decide to mitigate poverty by increasing taxes to fund free health care, housing projects and various DalTypes of programs of advantages that improve the standard of living for a large number of people. On the contrary, the government may try to improve the economic conditions by reducing taxes so that businesses have more money to hire employees, as it can reduce unemployment and improve their standard of living.

While the goals of fiscal policy usually relate to the improvement of the economy as a whole, some politicians are trying to implement policies that are proposed to improve the financial position of the real government. Some governments are establishing fiscal policies around the notion that governments should not only support job creation, but should directly take responsibility for creating jobs. In some countries, they evaluate a wide range of taxes and some of the incomes are used to create jobs for public employees who can work for Security Services, Post office or national healthcare providers. OpoThe parties can lead a campaign for changes in fiscal policy, which results in a reduction in government labor and lower taxes.

In addition to taxes, government agencies can also raise money by issuing debt instruments called bonds. Bonds are usually supported by tax money, which means that bond holders receive interest payments that are derived from tax revenues. Therefore, the government, which increases expenditure, will cause that taxes will increase in the long run, although one of the short -term objectives of its fiscal policy is to maintain low -level taxes.

theoretically, governments as non -profit organizations should have balanced budgets. However, deficits and surpluses are not unusual, and the objectives of the fiscal policy of some political groups include the removal of deficits and surpluses. The deficit can be deleted by increasing tax revenue, while the surplus can be removed either by increasing coast-three-expenditures or by returning tax revenue to taxpayers.