Fiscal Policy

Fiscal Policy

1. DIRECT TAX

   • Income Tax
     • An Increase would result in:
       • Less Wages
         • Less Spending
           • Less Demand
             • Less Profit
               • Less Jobs
     • A Decrease would result in:
       • More Wages
         • More Spending
           • More Demand
             • More Sales
               • Higher Prices
   • Corporation Tax
     • An Increase would result in:
       • Raise Prices
       • Reduce Profits
         • Unsatisfied Shareholders
           • & Unemployment
     • A Decrease would result in:
       • More Profit
         • Satisfied Shareholders

2. GOVERNMENT SPENDING

   • Increase
     • More Jobs
       • Better Economy
   • Decrease
     • Less Jobs
       • Less Spending
         • Less Demand
           • Businesses Aim To Survive

3. INDIRECT TAX VAT

   • Increase
     • Increase Prices
       • Less Demand
         • Less Sales
           • Less Profit
   • Decrease
     • Increase Prices
       • More Profit
     • Lower Prices
       • More Demand