What are the goals of fiscal policy

Answer 1

First of all let's understand what is fiscal policy. The fiscal policy is change of government spending. The impact of fiscal policy is changing aggregate demand in the economy. The increase of government spending is shiftting the aggregate demand to the right and decrease of government spending is shiftting the aggregate demand to the left. The goal of fiscal policy is stablizing the economy when there is shock. For example, the COVID last year break out and affects the economy deeply. In order to stimulate economy and make sure the business and public still be able to produce and consume, most countries' governments are increasing government spending to avoid the economic recession going deeper.