Fiscal policy is a policy in which a country’s authorities use fiscal tools to adjust the economy for its economic status quo. Expansion-type policies are usually used in times of social and economic depression. The state uses fiscal means to help activate and stimulate social demand. Specifically, The measures include giving certain tax incentives, expanding fiscal expenditures, etc. to increase the overall money supply in the society, so that the overall social demand can be effectively stimulated, thereby activating the overall social economy. Usually expansionary fiscal policy is used during deflationary periods.
The three major means of fiscal policy refer to a series of fiscal means and fiscal measures adopted by the state to achieve certain fiscal policy objectives. The three major means of fiscal policy are: fiscal revenue, fiscal expenditure, and national debt.
Fiscal revenue is mainly composed of taxation, which refers to a normative form in which the state participates in the distribution of social products in accordance with the law in order to provide public products to the society and meet the common needs of the society.
Fiscal expenditure is the general expenditure of the government to meet the needs of the management of public resources for the social development of enterprises, also known as the current item cost expenditure. Including corporate purchasing expenditures and technology transfer expenditures.
National debt is a form of raising financial funds in accordance with the principle of corporate credit compensation, and it is also an important technical means to realize China’s macroeconomic control and fiscal policy.
