Meaning & use
fiscal policy
Last updated
Meaning
nouncountable or uncountable
the government's use of taxation and public spending to influence the economy
Grammar: Can be countable when referring to specific policies, or uncountable when talking about the concept in general.
Patterns
- fiscal policy
- government fiscal policy
- tight fiscal policy
- loose fiscal policy
The government's fiscal policy aims to stimulate economic growth.
Fiscal policy is often used alongside monetary policy to manage the economy.
Expansionary fiscal policy involves increasing spending or cutting taxes.
Word forms
| plural | fiscal policies |
|---|
Common combinations
- expansionary fiscal policy
- Expansionary fiscal policy can help reduce unemployment.
- contractionary fiscal policy
- Contractionary fiscal policy is used to control inflation.
- tight fiscal policy
- A tight fiscal policy may slow down the economy.
- loose fiscal policy
- Loose fiscal policy can lead to higher inflation.
- fiscal policy measures
- The budget includes several fiscal policy measures.
Synonyms and how they differ
- budgetary policy
- Similar but less common; focuses on the budget rather than the broader use of taxation and spending.
- tax and spend policy
- Informal and often disapproving; highlights the taxation and spending aspects.
Opposites
Commonly confused: fiscal policy or monetary policy?
fiscal policy vs monetary policy
Monetary policy is controlled by a central bank and involves interest rates and money supply; fiscal policy is government taxation and spending.
Practice
Which of the following is an example of fiscal policy?
Choose one answer.
Fiscal policy involves government taxation and spending. Increasing spending on infrastructure is a fiscal action. The other options are monetary policy tools.
Make it your own
Write a sentence using “fiscal policy”, then check it and compare it with the examples above.