The main reason for employing contractionary fiscal policy in a time of strong economic growth is to keep prices from rising too much or too rapidly
Fiscal policy is the use of public expenditure and taxation to affect the economy, particularly macroeconomic conditions. These include employment, inflation, economic expansion, and the total demand for goods and services.
The government may reduce tax rates or boost spending during a recession to boost demand and the economy. On the other hand, it can increase rates or reduce spending to slow down the economy in order to battle inflation. Monetary policy, which is implemented by central bankers rather than elected government officials, is sometimes contrasted with fiscal policy.
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