Fiscal policy is one of the most important parts of economic policy which targets three large groups: allocation, distribution and stabilization. Allocation fiscal policy influences the investment and the use of economic resources to achieve results different from those which would have led the private activities in the process of market-making.
Distribution fiscal policy aims to correct the conditions arising from the market distribution, so that they become more socially equitable. It is engaged in the distribution of income and property, but as well as with opportunities, consumption and use. Today, the term fiscal policy mainly refers to stabilizing fiscal policy, which is the task of applying the law on tax collection and enforcement of expenditure to moderate fluctuations in economic activity caused by the action of the market, taking care of normal utilization of productive potential and price stability. The stabilization of fiscal policy became an important part of economic policy after World War II, with the popularity of the Keynesian economic theory.
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