This document defines fiscal policy and its objectives, instruments, types, criticisms and effects. It also compares fiscal policy to monetary policy. Fiscal policy uses government expenditure and revenue programs to influence economic growth, employment, income disparities and inflation. The key instruments of fiscal policy are taxes (such as income, corporate, sales and VAT), public expenditures (development and non-development), and public debt. The document discusses expansionary and contractionary fiscal policies and their impacts on unemployment, expansion, contraction and inflation.

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Warsaw.Vistula University. 18.11.2013
Saidjon Rahimov and Karomatullo Karimov

2. * Definition of Fiscal Policy
* Objectives of Fiscal Policy
* Instruments of Fiscal Policy
* Types of Fiscal Policy
* Criticisms of Fiscal Policy
* Effects of Fiscal Policy
* Difference between Fiscal/Monetary Policy
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3. *Fiscal Policy- is a policy under which
government uses it’s expenditure
and revenue programs to produce
desirable effects and avoid
undesirable effects on national
income, production and
employment.
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4. * Development of country
* Economic development and growth
* Reduction of disparities of income
* Expansion of employment
* Price stability and inflation
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5. * Taxes-refers to the income or receipts from
public
Tax Revenues
-Personal income tax
-Corporate tax
-Service tax
-Sales tax
-Toll tax
-Value added tax
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Non-Tax Revenues
-Fees
-License fees
-Price of Public
goods/services
-Fines
-Penalties

6. * Public Expenditure-refers to the expenditure
incurred by the two major categories
1.
Development expenditure
-Development of public enterprise
-Development of infrastructure
-Social welfare
2.
Non development expenditure
-Unproductive expenditures are termed as non
development expenditures
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7. * Public debt-is spending more money than we have.
Expenditure – National income = Deficit
Deficit1 + Deficit2 + Deficit3 +….. = Public Debt
This Public Debt can be drawn internally or externally.
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8. *Expansionary Fiscal Policy
*Contractionary Fiscal Policy
*Discretionary Fiscal Policy
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9. * Disincentives of tax cuts
* Side effects on public spending
* Poor information
* Time lags
* Budget deficit
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10. * Unemployment
* Expansion
* Contraction
* Inflation Issues
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11. * Fiscal policy – controls the tax rate and
government expenditure in the economy.
* Monetary policy – controls the supply of money
often targeting a rate of interest for the
purpose of promoting economic growth and
stability.
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