Question

G.K. Shaw's definition of fiscal policy includes any design to:

Options

• Regulate the supply of money and the level of interest rates

• Alter private investment and consumption only

• Change the price level, composition or timing of government expenditure or to vary the burden, structure or frequency of tax payment

• Change only the total size of government expenditure and taxation

Answer 1

G.K. Shaw's definition is the broadest: it covers any design to change the price level, composition or timing of government expenditure, or to vary the burden, structure or frequency of tax payment. It extends beyond simple changes in totals to the structure and timing of fiscal instruments.