Supplementary resources by topic. Fiscal Policy is one of 51 key economics concepts identified by the Council for Economic Education (CEE) for high school classes.

Fiscal Policy

On this page:

Definitions and Basics
In the News and Examples
A Little History: Primary Sources and References
Advanced Resources
Related Topics

Definitions and Basics

Fiscal Policy, from the Concise Encyclopedia of Economics

Fiscal policy is the use of the government budget to affect an economy. When the government decides on the taxes that it collects, the transfer payments it gives out, or the goods and services that it purchases, it is engaging in fiscal policy. The primary economic impact of any change in the government budget is felt by particular groups—a tax cut for families with children, for example, raises the disposable income of such families. Discussions of fiscal policy, however, usually focus on the effect of changes in the government budget on the overall economy….

Fiscal Policy, at Answers.com

Government spending policies that influence macroeconomic conditions. These policies affect tax rates, interest rates and government spending, in an effort to control the economy.

In the News and Examples

A Little History: Primary Sources and References

Supply-Side Economics, from the Concise Encyclopedia of Economics

Supply-side economics provided the political and theoretical foundation for a remarkable number of tax cuts in the United States and other countries during the eighties. Supply-side economics stresses the impact of tax rates on the incentives for people to produce and to use resources efficiently. A person’s marginal tax rate—the tax rate she pays on an additional dollar of income—determines the breakdown between taxes, on the one hand, and income available for personal use, on the other. Since they directly affect the incentive of people to work, to save and invest, and to avoid and evade taxes, marginal tax rates are central to supply-side analysis….

Advanced Resources

Related Topics

Roles of Government

Aggregate Demand

Budget Deficits and Public Debt

Government Failures and Public Choice Analysis

Income Distribution

Incentives

GDP