Fiscal policy is a mechanism the government employs to influence the economy.Fiscal policy is based on

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Fiscal policy is generally defined as the government's use of taxing and spending decisions to influence the economy. This can include measures such as increasing government spending to stimulate demand or reducing taxes to encourage investment and growth. The goal of fiscal policy is often to stabilize the economy or promote certain outcomes, such as low unemployment, stable prices, or economic growth. While a balanced budget may be a desirable outcome for some policymakers, it is not necessarily seen as the key to a healthy economy. Similarly, fiscal policy is not based on the money supply or the Federal Reserve Board's projections, although these can be relevant factors in shaping policy decisions. Finally, while fiscal policy is often tied to particular budget cycles, such as the fiscal year, these cycles are not themselves the basis for policy choices.

Fiscal Policy Is a Mechanism the Government Employs to Influence