How does fiscal policy work?
An example of an AI chatbot conversation about fiscal policy and its impact on the economy.
Can you explain how fiscal policy works?
Sure! Fiscal policy involves government spending and taxation to influence the economy.
What are the main tools of fiscal policy?
The main tools are government spending, tax policies, and transfer payments.
How does fiscal policy affect inflation?
Fiscal policy can affect inflation by increasing demand through spending or reducing it through taxes.
Can you give an example of fiscal policy in action?
Certainly! During a recession, a government might increase spending on infrastructure to stimulate the economy.
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