Fiscal Policy Intervention

Fiscal policy intervention
A .indirect taxes:can be used to raise the price of demerit goods and products with negative externalities designed to increase the opportunity cost of consumption and thereby reduce consumer demand towards a socially optimal level.
B .subsidies: to consumers will lower the price of merit goods.
C .tax relief:the government may offer financial assistance such as tax credits for business investment in reseaech and development.Or a reduction in corporation tax designed to promote investment and employment.
D. changes to taxation and welfare payments:can be used to influence the overall distribution of income and wealth--for example higher direct tax rates on rich households or an increase in the value of welfare benefits for the poor to make the tax and benefit system more progressive