Economics A-Level
Fiscal Policy and Debt Sustainability
What Fiscal Policy and Debt Sustainability means in Economics A-Level, as defined for Pearson Edexcel.
Definition of Fiscal Policy and Debt Sustainability
Analysis of government spending and taxation as tools for demand management. Evaluation must consider the 'crowding out' effect where public sector borrowing increases interest rates, potentially reducing private investment (I) and consumption (C).
Topics that use Fiscal Policy and Debt Sustainability
- Role of the state in the macroeconomy (Pearson Edexcel A-Level)
Related terms
Using Fiscal Policy and Debt Sustainability in the exam
Definition questions usually carry one or two marks, and examiners look for the precise wording. Write the definition from memory, check it against the version above, and then use the term in a longer answer on the same topic so it sticks.
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