Advantages and disadvantages of policies Strengths and weaknesses of fiscal, monetary and supply-side policies Fiscal policy - strengths. It is easy to create a budget deficit. Advantages of fiscal policy include the ability to allocate money to the areas that need it most and having a way to provide a stimulus without adding to the deficit. But while the benefits or effects on the economy of the newest "Tax Cuts and Jobs Act" of 2017 largely remain to be seen, fiscal policy continues to be a … PRO: To boost the economy Fiscal policy is how Congress and other elected officials influence the economy using spending and taxation. Talking about fiscal here, there is another post on advantages and disadvantages of expansionary fiscal policy. Fiscal measures are frequently used in tandem with monetary policy to achieve certain goals. . 989 Words 4 Pages. Governments routinely spend more money than they get in taxes. Learn more about fiscal policy in this article. Thus, now you know the importance and objectives of fiscal policy. Fiscal policy can be known as the adjustment of government towards their spending levels and tax rates to control and influence a nation’s economy or aggregate demand (AD). Fiscal policy, measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures. Principal Objective of Fiscal Policy and Its Advantages. The combination and interaction of government expenditures and … Read More: 22 Advantages and Disadvantages of Privatization (Economics) 7 Limitations and Types of Macroeconomics Analysis (Explained) Advantages Of Fiscal Policy. Contractionary Fiscal Policy . 1. This is called a deficit. Voters like both tax cuts and more benefits, and as a result, politicians that use expansionary policy tend to be more likable. Fiscal Policy and How It Affects the Economy Fiscal Policy consists of changes in government expenditures and/or taxes to achieve economic goals, such as low unemployment, price stability, and economic growth. You can read it from here. If the problem is one of unemployment, changes in taxation and particularly government spending may have a significant impact on the level of national income through the increase in aggregate demand that they cause. The Cons of Fiscal Policy. Taxation; Resources need to be mobilized so that there can be funds for financing the development programs in the public sectors. Managing your budgets using a fiscal-year calendar, rather than a standard calendar can be a pain because you’ll be operating on a different schedule than your vendors, government agencies and clients -- but those reasons also offer benefits. 1130 Words 5 Pages. The Advantages And Disadvantages Of Fiscal Policy. 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