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Economics vocabulary · Fiscal Policy and Public Finance

Fiscal policy

Meaning in economics, with examples

/ˈfɪskl ˈpɒləsi/nounCore term

In economics, fiscal policy means: The government's decisions about taxes and public spending, used to influence demand, growth, jobs and the state of the public finances.

In Turkish: maliye politikası

How it is used

Fiscal policy is expansionary (more spending or lower taxes) or contractionary and tight (less spending or higher taxes). It is run by the government and the finance ministry, and its main document is the annual budget.

Example sentences

  1. The government used fiscal policy to support households during the crisis, sending direct payments to low-income families.

  2. Economists warned that loose fiscal policy could work against the central bank's efforts to cut inflation.

Common collocations

  • expansionary fiscal policy
  • tight fiscal policy
  • fiscal discipline
  • fiscal stimulus
  • fiscal year
  • monetary policyThe actions a central bank takes to influence interest rates, the money supply and credit in order to control inflation and support the economy.
  • government spendingMoney that the state spends on public services, investment, salaries and social payments such as pensions; a key tool of fiscal policy.
  • taxationThe system by which a government collects money from people and businesses through taxes on income, profits, spending and property.
  • budget deficitThe gap that appears when a government spends more than it collects in taxes and other revenue during a year; it is usually covered by borrowing.
  • austerityA policy of sharply cutting government spending, and sometimes raising taxes, in order to reduce a budget deficit or public debt.

More terms: Fiscal Policy and Public Finance

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This page explains English vocabulary for learners. It is not financial advice.