Economic Policies: What is the Fiscal Policy? Essay

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Introduction

Economic policies are aimed at finding satisfactory solutions to various problems that emerge from time to time in any economic system. In most instances, the so called problems present themselves in the form of inflation, unsatisfactory or poor economic growth and unemployment. It is not always simple and straight forward to solve such dilemmas, especially because their impact, implications and importance changes from time to time. (Roux, 2008).
Making use of the monetary policy and the fiscal policy, the South African government has made efforts to address growth and poverty in the country. The National Development Plan (NDP) and the National Growth Plan (NGP) are two strategies that have been designed by the government
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Introduction

Economic policies are aimed at finding satisfactory solutions to various problems that emerge from time to time in any economic system. In most instances, the so called problems present themselves in the form of inflation, unsatisfactory or poor economic growth and unemployment. It is not always simple and straight forward to solve such dilemmas, especially because their impact, implications and importance changes from time to time. (Roux, 2008).
Making use of the monetary policy and the fiscal policy, the South African government has made efforts to address growth and poverty in the country. The National Development Plan (NDP) and the National Growth Plan (NGP) are two strategies that have been designed by the government as vehicles to address the problems that South Africa faces.
What is the Fiscal policy?
‘Fiscal policy’ is the name given to government policies which seek to influence government revenue (taxation) and government expenditure (Griffiths & Wall, 2005, p. 370). Increasing or decreasing tax or government income will have an impact on the national income. When the equilibrium national income level changes, output (supply) also changes. Employment as well as inflation will be directly affected. When there is less activity in the market, the result is an increase in unemployment. In such a case the government must use and expansionary fiscal approach to counter this. Government spending and the reduction of taxes will mean that there is more
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