What is fiscal policy, who makes it, and what is it designed to influence?

Fiscal policy is the strategy to use government's expenditure and taxation to affect economic variables. It is designed by the government to affect consumption and spending.

Explanation:

Fiscal policy is government's attempt to affect economy through the instruments of spending and taxes. Fiscal policy can be expansionary, contractionary and neutral.

Fiscal policy is formulated by the government.

It is designed to affect consumption and spending in the economy.

In case of recession, the government can adopt expansionary fiscal policy.

On the other hand, in case of inflation, contractionary fiscal policy is adopted.