Fiscal Policy pertains to how authorities make adjustments to a country’s tax rates and spending levels. This gives users the ability to monitor and ultimately impact the economy of a country by delineating how public funds are gathered and used.
Monetary policies and Fiscal Policies go hand in hand. This is the case as the tandem is able to change the direction of an economy and maintain its stability. This effectively stabilizes the rate of economy as well and renders positive effects in the employment rates and other socioeconomic indices.
Increased government spending and tax cuts are manifestations of Fiscal Policy implementation as these aim at increasing aggregate demand alongside the drawing down of a budget’s surplus.