MANAGEMENT

Detailed explanation-1: -The two main tools of fiscal policy are taxes and spending. Taxes influence the economy by determining how much money the government has to spend in certain areas and how much money individuals should spend.

Detailed explanation-2: -In the United States, fiscal policy is directed by both the executive and legislative branches of the government.

Detailed explanation-3: -Ministry of Finance formulates the fiscal policy.

Detailed explanation-4: -Fiscal policy can be distinguished from monetary policy, in that fiscal policy deals with taxation and government spending and is often administered by a government department; while monetary policy deals with the money supply, interest rates and is often administered by a country’s central bank.

Detailed explanation-5: -Fiscal policy is defined as the policy under which the government uses the instrument of taxation, public spending and public borrowing to achieve various objectives of economic policy. Simply put, it is the policy of government spending and taxation to achieve sustainable growth.