GAO Glossary of Terms and Definitions (September 2005)

Fiscal Policy

(Economics Term)

Federal government policies with respect to taxes and spending that affect the level, composition, and distribution of national income and output. The budget process is a major vehicle for determining and implementing federal fiscal policy. Many summary indicators of fiscal policy exist. Some, such as the budget surplus or deficit, are narrowly budgetary. Others attempt to reflect aspects of how fiscal policy affects the economy.

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