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Types of Fiscal Policy
2,137 plays

This lesson deals in detail with expansionary and contractionary fiscal policies.

Surabhi Agrawal
Rank 358 UPSC 2018, Chartered accountant and company secretary with 4 All India ranks, passionate learner and above all a positive soul.

Unacademy user
sir sankhya aur Sanrakshan Se Kya tatparya Hai
ma'am I get to know some other ways of increasing public expenditure other than increase in public debt?
Well explained and interesting.Upload more topics.
Is it suffice for prelims??
Surabhi Agrawal
2 years ago
2 years ago
Thank you soo muvh
this is really superb course please continue your course regarding Exchange rate and all key aspects in economy please mam continue your course helps lot....
Very, awesome course .... highly recommended and applaudable.
  1. TYPES OF FISCAL POLICY Presented by Surabhi Agrawal

  2. About Myself A Chartered Accountant (CA) and Company Secretary (CS) by Qualification, I love teaching and Public speaking 1. a. Have secued llIndaank4th and:sthinACCndFinalrespectively 3. Have appeared for UPSC Mains 2017 For the courses related to Monetary Policy of India, go to the following link: 4. simplified/HSN46R3Y

  3. Types of Fiscal policy Expansionary Fiscal policy Contractionary Fiscal policy

  4. Expansionary Fiscal policy - Here the focus is on increasing money flow in the " It can be done either by increasing public spending - It is used when an economy is in a recession, high " The goal is to put more money in the hands of economy or by reducing taxes. unemployment, Deflation, etc. consumers so they spend more and stimulate the economy.

  5. Reduction in tax rates and increase in public expenditure Increased Increased spending power of people Aggregate Demand Increased Growth Increased Employment Increased Output

  6. Contractionary Fiscal Policy Here the focus is on decreasing money flow in the economy It can be done either by decreasing public spending or by increasing taxes. It is used when an economy is in a state of high Inflation. - The goal is to put less money in the hands of consumers so they spend less and prices are brought under control

  7. Increase in tax rates and reduction in Public expenditure Decreased spending power of people Decreased Aggregate demand May lead to reduction in employmentand Growth Reduction in prices

  8. SUMMARY Taxes Spending Contractionary policy (High demand and Inflation) Increase Decrease Decrease Increase Expansionary policy (Low demand and employment)