Fiscal policy: Government use of spending and taxation to influence the economy.
How to apply it: Explain how expansionary fiscal policy (increased G or decreased T) shifts AD right and contractionary fiscal policy shifts AD left.
Course: AP Macroeconomics · Unit: National Income and Price Determination
Practice questions about Fiscal policy on AimFive — get rubric-based feedback showing exactly which points you earned.
AP and Advanced Placement are trademarks of College Board. AimFive is not affiliated with or endorsed by College Board.