Fiscal policy refers to the government's use of taxation and spending to influence economic performance. It can have both short-term and long-term economic effects. In the short-term, fiscal policy can be used to stabilize the economy by increasing or decreasing taxes and spending. This can stimulate economic activity and help to reduce unemployment. In the long-term, fiscal policy can be used to encourage economic growth and reduce income inequality by shifting resources from the wealthy to the less affluent.
Explain the effects of the given economic policy.
Fiscal policy