Pinent f under developed countries types of fiscal policy fiscal policy discretionary policy non-discretionary policy 1. discretionary policy discretionary poli

pinent f under developed countries Types of Fiscal Policy Fiscal Policy Discretionary Policy Non-Discretionary Policy 1. Discretionary Policy Discretionary policy mean deliberate change in the government expenditure and taxes to influence the levet o td output and prices. Fiscal policy generally aims at managing aggregate demand for goods and serviCEs. It may generally take three forms () Changing Taxes with Government Expenditure Constant: When taxes are reduced, while keeping government expenditure unchanged, they increase the disposable income of houscholds and businesses, further increasing private spending. But the amount of increase will depend on of whom the taxes are cut, to what extent, and on whether the taxpayers regard the cut temporary or permanent. (ii) Changing Government Expenditure with Taxes Constant: T'he second method is more useful in conteslt deflationary tendencies. When the government increases its expenditure on goOds and services. keeping taxes constat stant, aggregate demand goes up by the full anmount of the increase in government spending Contact Us: Website: www odun