All the information about the fiscal policy is provided in this slide for ever BBA student it is easy to understand the fiscal policy and its terms and types INFORMATION FOR CLASS PROJECTS AND CLASS PRESENTATION

2. Fiscal Policy
Group:
Nabeel Jaffer BBA-16-144
Ibrahim Daud BBA-16-172

3. Introduction
Fiscal policy is the means
• by which a government adjusts its spending
levels
• tax rates
To monitor the country economy
Sister strategy:
to monetary policy through which a central
bank influences a nation's money supply

5. Types of Fiscal policy
• Neutral Fiscal policy
• Expansionary Fiscal policy
• Contractionary Fiscal policy

6. Neutral Fiscal policy
• G=T (Govt. spending = Tax Revenue) neutral
effect on economy
• Fiscal neutrality occurs when taxes and
government spending are neutral, with
neither having an effect on demand.

7. Expansionary Fiscal policy
• Expansionary fiscal policy means that the
government is increasing government
spending and reducing taxation
• Attempt to increase the money available in
the economy.
• Government spending > Tax
Government
spendings
Tax

8. Contractionary Fiscal policy
• Contractionary fiscal policy is when the
government increases taxation and reduces
government spending
• In an attempt to reduce money in the
economy and as a result inflation
• Government spending < tax
Govt.
Spendings
Tax

9. Government Activities
• Methods of funding:
 Taxatation
 Seigniorage, the benefit from printing money
 Borrowing money from the population or from
abroad
 Consumption of fiscal reserves
 Sale of fixed assets

10. Government activities
• Spending of Revenues
Non-productive Productive
Health Dams
Education Roads
Defense Mills
Justice Bridges
Social Security Railways
Embassies Electricity Plants
Engineering units

11. Objectives of Fiscal policy:
• To Achieve Equal Distribution of Wealth
• Increase in Savings
• Degree of inflation
• To Achieve Economic Stability
• Price stability

12. Limitation of Fiscal Policy:
• Forecasting
• Illiteracy
• Solution for Unemployment
• Inadequate Resources

13. Islamic Point of view:
Islam teaching is very important and play important
role in fiscal policy like.
• Equally Distribution Of Resources
• Collect Zakat from rich
• Islamic Sources of Revenue
• Zakat
• Ushar
• Fitrana
• Sadqat
• Khaiarat

15. Research Paper No.1
• Name of Paper:
The Impact of Fiscal Policy on Real Output
• Name of Journal:
Business And Economics Journal
• Writer Name
Prof. Dr. John O’Braine
• Variables:
• Co-integrating vectors
• Causality
• real effect
• primary motivators

16. Research Paper No.1
• Hypothesis:
• H1 = Fiscal policy does not matter for stabilizing real
economic activities
• H2 = Monetary policy is matters for stabilizing real
economic activities
• Methodology:
• It is secondary data
• It is qualitative data
• Conclusion:
This claims that fiscal policy causes the real output over the
long-run More-over both monetary and fiscal policy actions
causes significant short run effect on real side of the economy

17. Research Paper No.2
• Name of Paper:
Fiscal Policy & Economic Growth as Empirical
Investigation
• Name of Journal:
Elsevier
• Writer name:
Dr. Richard B. Freeman
• Variables:
• Growth
• Development
• Investment
• Taxation
• association
• regulatory

18. Research Paper No.2
Hypothesis:
H1= Fiscal policy is influenced by the scale of the
economy, measured by which its population
H2=The effects of taxation are difficult to isolate.
Methodology:
• It is primary data
• It is qualitative data
Conclusion:
It conclude that, it is true that fiscal policy is influence by the
scale of economy such as American economy is large so
their fiscal policy will be of highly importance and the
effects of taxation are not difficult to isolate

19. Research Paper No.3
• Name of Paper:
Fiscal policy and Economic Growth in South
Africa
• Name of Journal:
Journal of Economic Studies
• Writer Name:
Dr. Frank S. Budnik
• Variables:
• Output
• Structural VAR
• National Economy
• Strength
• Poverty

20. Research Paper No.3
• Hypothesis:
H1= Fiscal policy is associated with increase in government
expenditure in Africa
H2=Fiscal policy is associated with increase in tax revenue in Africa
• H3=Fiscal policy is associated with budget deficit in Africa
• Methodology:
– Qualitative
– Secondary data
• Conclusion:
This effect the fiscal policy on output to be quite modest but persistent,
however, the response from interest rate was temporary and substantial in
some cases. And it decrease budget deficit in Africa