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Fiscal Policy - Fiscal Policy /.Thetwo .Thegovernment

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Fiscal Policy Fiscal policy  is carried out by the legislative and/or the executive branches of government. The two  main  instruments  of fiscal policy are  government expenditures  and  taxes.  The government  collects taxes in order to finance expenditures on a number of  public goods and services —for  example, highways and national defense.  Budget deficits and surpluses.  When government expenditures  exceed  government tax revenues  in a given year, the government is running a  budget deficit  for that year. The budget deficit, which is  the difference between government expenditures and tax revenues, is financed by government  borrowing; the government issues long-term, interest-bearing bonds and uses the proceeds to  finance the deficit. The total stock of government bonds and interest payments outstanding, from 
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