👉 A fiscal weapon is a policy tool used by governments to influence economic conditions, often through measures that manipulate government spending, taxation, or borrowing. These tools can be employed to stimulate economic growth during downturns by increasing public expenditure or cutting taxes, or to curb inflation and slow down an overheating economy by reducing spending or raising taxes. Fiscal weapons can also be used to achieve specific economic objectives, such as reducing public debt or promoting social welfare. However, their effectiveness depends on various factors including the state of the economy, political will, and the overall fiscal health of the government.
