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Fiscal Policy
Quick revise
Fiscal policy looks at how government spend their money and how they control their taxes.
There are 2 types of fiscal policy:
Contractionary fiscal policy: Where the government reduce spending and / or when they make taxes higher, they try to increase its PSBR( public sector borrowing requirement) to fund the tax drops they also do this to reduce its surplus on its budget for the fiscal year.
Expansionary fiscal policy: Where the government cut taxes or increase government spending. They will increase the amount the government borrows to fund the expenditure.
