Week 5 Checkpoint Fiscal policy is used by the U.S. government to make sure that inflation is controlled during economic recessions. The President and Congress share the responsibility of controlling fiscal policy management. Increases and decreases in taxes and spending within the government are other ways in which the economy is controlled by fiscal economy. The government sets the amount of spending and taxation according to how the current economy is. In a strong economy where inflation is more likely, fiscal policies will be implemented by the government by raising taxes and lowering spending. The opposite is true when the economy is in a slump. The government uses fiscal policies to jump start the economy with tax cuts to and increased spending. The housing market is a good example of how the government has control over certain markets. There is an $8,000 dollar tax credit that was implemented by the government for first time home buyers as an incentive to buy a new home. Through tax decreases and more
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