Compare and contrast economic policy with fiscal policy and explain their role in shaping national economic outcomes.

What will be an ideal response?

Economic policy consists of the efforts of government to regulate and support the economy in order to protect and expand citizens’ financial well-being and economic prospects as well as to support businesses in the global financial system. It is a broad-based palette of tools in comparison to fiscal policy, which is a single tool involving the use of government spending and taxation in order to shape national economic outcomes. While both are intended to shape the national economy, as measured by such indicators as gross domestic product, the consumer price index, and the national and/or regional unemployment rate(s), fiscal policy is much more focused on the use of government spending and taxation, while economic policy paints with a much broader brush.
Student answers may vary but should discuss leading economic indicators and the use of spending and taxation for fiscal policy.