How does the government typically change fiscal policy to try to keep the economy stable during a period of rapid economic growth

Governments and central banks use fiscal policy, which involves changing the level of government expenditure and taxation to try to limit the extent of the bussines cycle. If an economy is overheating, that is expanding to quickly during a period of rapid economy; it means that industry is working at full capacity and producing as much as it is possible. in this case the govenment implements a deflationary  fiscal policy by reducing the amount of economic activity by raising tax rates or cutting government expenditure. This reduces the level of demand and helps reduce inflation

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