What is the result of applying fiscal policy?

The result of applying fiscal policy is a significant impact on economic growth and employment levels. Fiscal policy, which involves government spending and taxation decisions, is designed to influence the economy by either stimulating growth or cooling down an overheated economy.

When the government increases spending or decreases taxes, it puts more money into the hands of consumers and businesses, leading to higher demand for goods and services. This can stimulate economic growth and potentially reduce unemployment as businesses hire to meet the increased demand. Conversely, if the government reduces spending or increases taxes, it can slow economic growth and lead to higher unemployment.

While changes in stock prices, operational efficiency, and profit margins can be influenced by various factors, they are not direct results of fiscal policy in the same way that alterations in economic growth and employment levels are. These elements may be affected indirectly as a result of fiscal policy changes, but the primary aim of fiscal policy is to influence the broader economy and its overall employment landscape.