Economics A-Level
Fiscal policy
What Fiscal policy means in Economics A-Level, as defined for AQA.
Definitions of Fiscal policy
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Reference: AQA
The note refers to it as the area in which the government retains full control over decisions, while the OBR only advises and forecasts.
Contractionary measures, specifically raising taxation or cutting government spending, are required to rebalance a budget deficit.
Impacts the macroeconomy through both the total amount and the specific allocation of government spending and taxation.
The manipulation of government spending, taxation and the budget balance to influence the economy.
The use of government spending and taxation to alter the pattern of economic activity.
The government manipulating its spending and taxation to influence aggregate demand.
Topics that use Fiscal policy
- Fiscal policy (AQA A-Level)
Related terms
- Aggregate demand and supply
- Aggregate supply
- Automatic stabilisers
- Budget balance
- Budget deficit
- Budget surplus
- Crowding out
- Direct taxes
Using Fiscal policy in the exam
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