Question

discuss the role of fiscal policy in stabilizng the national economy.

Answer 1

Fiscal policy plays a very important role in stabilizng the national economy because this is the policy used by the government which has the discretionary power on use of country''s budget and the tax policy.

Under this fiscal policy, when there is low demand, the government reduce taxes and increase spending so that aggregate demand can be enhnaced and economy can be stablized.

On the other hand, when there is high price levels, the government might slow down demand by raising taxes which will lower economy growth resulting in the economic shifting to stable growth.

the above is answer..