Advanced English Dialogue for Business – Fiscal policy

Listen to a Business English Dialogue About Fiscal policy

Lola: Hi Alexander, have you heard about fiscal policy in economics?

Alexander: Yes, I have. It’s when the government adjusts its spending and taxation to influence the economy’s overall performance, right?

Lola: That’s correct. Fiscal policy aims to stabilize economic fluctuations, promote growth, and manage inflation.

Alexander: So, how does the government decide when to use expansionary or contractionary fiscal policy?

Lola: It depends on the current state of the economy. If there’s a recession, the government might use expansionary policy to stimulate spending and boost economic activity.

Alexander: I see. And what about during times of high inflation?

Lola: In that case, the government might implement contractionary fiscal policy to reduce spending and curb inflationary pressures.

Alexander: That makes sense. Does fiscal policy only involve government spending, or does it also include taxation?

Lola: Both. Fiscal policy involves decisions about both government spending and taxation levels to achieve economic objectives.

Alexander: I understand. So, fiscal policy plays a crucial role in shaping the overall economic environment.

Lola: Exactly. It’s one of the tools governments use to manage the economy and promote stability and growth.

Alexander: Thanks for the explanation, Lola. I have a better understanding of fiscal policy now.

Lola: No problem, Alexander. I’m always happy to discuss economic concepts. Let me know if you have any more questions.