Professional Documents
Culture Documents
Scope of public
Finance
Protection of Infant
Industries
Optimum utilization of
resources
Economic planning
Providing employment
opportunities
Market Failures
Issues and
Problems
Philippines Policy
on Public Finance
Monetary Policy
CONTRACTIONARY FISCAL
POLICY:
A form of fiscal policy in which a decrease in
government purchases, an increase in taxes, and/or a
decrease in transfer payments are used to correct the
inflationary problems of a business-cycle expansion.
The goal of contractionary fiscal policy is to close an
inflationary gap, restrain the economy, and decrease
the inflation rate. Contractionary fiscal policy is often
supported by contractionary monetary policy. An
alternative is expansionary fiscal policy.
END