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how the government can use fiscal policy for capital formation in the process of economic development?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter17: Economic Growth: Resources, Technology, Ideas And Institutions

Section: Chapter Questions

Problem 1WNG

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Question

how the government can use fiscal policy for capital formation in the process of economic development?

Expert Solution

Step 1

Answer -

Fiscal Policy - It is policy under which government uses spending levels and tax rates to monitor and influence a nation's economy.

Y = G + I + C - T +X -IM

Y = Out put

G = Government Spending

C = Consumption

T = Taxes

X = Export

IM = Import

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