Fiscal policy
Fiscal policy is the government's use of spending and taxes to influence the economy. Spending more or taxing less stimulates growth; the reverse cools it.
It is set by lawmakers, while monetary policy is set by the central bank. Running a deficit means spending more than is collected in taxes, funded by borrowing.
In Journey Shares
Game taxes go to a public treasury that pays for bank bailouts before any new money is printed. →
Related terms
- Monetary policy: Monetary policy is how a central bank manages interest rates and the money supply to keep inflation low and employment high.
- GDP (gross domestic product): GDP is the total market value of all final goods and services produced in a country in a period.
- Recession: A recession is a significant, widespread fall in economic activity that lasts more than a few months.
Guides
Practise with $10,000 in play money
Free. No real money involved.
For learning only. This isn't financial advice.