2019•Oxford University Press eBooksRequires access
Influences on aggregate demand: Government revenues and taxation
Andrew Gillespie
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Abstract
This chapter considers elements of government fiscal policy and their effect on aggregate demand. Fiscal policy refers to decisions made by a government regarding its spending, taxation, and benefits policies. Changes to fiscal policy affect aggregate demand. Government spending covers a wide range of goods and services, including defence, social security benefits, education, and debt repayments. Taxes are charges levied on individuals and organizations in an economy, which in part finances government spending.