Fiscal Policy

Fiscal Policy
Student’s Name
Institution
Fiscal Policy
Government institutions and even private organizations have some guiding principles used in coordination and management of affairs to ensure the smooth running of operations. These guiding principles make up the policies. Fiscal policy, therefore, is a set of management principles that government imposes on taxation, government spending, and transfer payments to ensure the stability of a country’s economy (Bonam & Lukkezen, 2019). Fiscal policy often works concurrently with monetary policies to overseas aspects such as inflation and debt that are crucial to a country’s Gross Domestic Product (GDP). Government spendings, taxes, and transfer payments constitute the tools that the fiscal policy imposed by a government uses to influence the overall GDP (Nash & Chapel, 2019). Recurrent expenditure used to pay government employees and bills, plus any investments made by the government falls under government spending. Taxation is the most apparent tool used by fiscal policy to influence the GDP by varying the marginal tax accord...