What is the difference between active fiscal policy and passive fiscal policy?

What is the difference between active fiscal policy and passive fiscal policy Introduction: The Crucial Role of Fiscal Policy Hello, everyone! Welcome to today's video, where we'll be diving into the world of fiscal policy. As governments grapple with economic challenges, fiscal policy emerges as a powerful tool. It involves the use of government spending and taxation to influence the economy. Today, we'll be focusing on two distinct approaches: active and passive fiscal policy. Active Fiscal Policy: A Proactive Stance Active fiscal policy is characterized by a proactive approach. When faced with economic downturns, governments employing this strategy swiftly respond with measures to stimulate the economy. These measures often involve increased government spending, aimed at boosting demand and encouraging economic activity. Additionally, active fiscal policy may also include tax cuts, providing individuals and businesses with more disposable income. By injecting funds into the economy, active fiscal policy seeks to jumpstart growth and counteract recessions. The Pros and Cons of Active Fiscal Policy