fiscal policy--- Policies used to stimulate growth and alter economic
behaviour by tax incentives, tax penalties, etc.---sticks and carrots in other
words. Fiscal funding for infrastructure
projects also helps to send things in the right direction by providing living
wage jobs to those who are in need, with wages circulating and lifting the
economy with the multiplier
effect, increasing aggregate demand . Tax incentives for the middle class encourage special projects and
consumer spending with the money they thought would be owed in taxes. Tax incentives
on the rich are said to induce savings and investment in projects helping in
job creation, although it has become clear through the Great Depression
and the Great
Recession that the jobs created may not have living wages. Tax initiatives
for the poorest have an immediate “bang” in the economy by helping to clear off
the shelves of consumer goods. Some consider fiscal policy type as a way to
re-distribute wealth. Others recognise it as a way out of a great economic
storm, especially when combined with monetary policy.