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Fiscal policy can include deficit spending to stimulate demand for domestic goods and services to help unemployment or make efforts to cut deficits or raise the budget surplus to fight inflation.
There are many different types of Fiscal Policy. It all depends on the given situations the government is in. A government may adopt certain policies that can either increase or decrease output in the short run. For instance, if the government faces a threat of recession, it may adopt an expansionary fiscal policy. This policy involves increasing government spending and cutting taxes, in order to spur economic output...
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