What is Fiscal policy

Fiscal policies are the tax policies and spending budgets set by governments that have an effect on the economy. They are used in combination with monetary policies to achieve certain economic objectives. Fiscal policies can have positive or negative implications on the local economy. If applied correctly, they can increase the country's productivity levels by stimulating employment growth or keeping inflation under control. If the government is corrupt, however, the fiscal policy can have detrimental reprecussions on the economy.