Fiscal Policy

An economic term referring to how the government of a country manages money, especially in regards to taxation and revenue generation.

Fiscal policy is the economic term used to describe a government’s approach to the management of money and cash flow in a region. This policy usually encompasses everything from the principles guiding spending and borrowing, to how money is generated within the region. Ultimately, this policy greatly determines how businesses operate within a legal jurisdiction, what is considered legitimate business, and reasonable profit ranges.

Without fiscal policies, national economies would fall. They would be no different from unregulated markets where anything goes, so businesses can take undue advantage of the people and vice versa. Moreover, fiscal policies have significant implications for every sector within the region, as long as there is cash flow in that sector. Thus, a country’s fiscal policy is one of the major considerations of any visionary business before it commences operation in said country.

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