Here is a listing of new revision videos covering aspects of fiscal policy designed to support students taking AQA Economics.

Micro and Macro Aims of Fiscal Policy

Governments essentially have two main levers in their fiscal toolkit: taxation and government spending. Right now, whoever holds the keys to Number 11 Downing Street is facing a Trilemma: how to fund structurally increasing demands on public services, how to manage a historic mountain of national debt, and how to stimulate the elusive economic growth required to pay for it all, without triggering an investor revolt.

Taxation and Fiscal Policy

Taxation is the primary mechanism through which governments finance public expenditure, but its economic impact extends far beyond raising revenue. In macroeconomics, taxes are a crucial fiscal policy lever used to manage aggregate demand and control inflation. On a microeconomic level, taxation alters incentives. It can be used to correct market failures, such as taxing demerit goods or pollution, and to redistribute income for greater equity. The ultimate challenge for policymakers is balancing revenue needs with fairness and economic efficiency.

Government Spending and Fiscal Policy

Government spending is a fundamental pillar of UK fiscal policy, acting as both an injection into the circular flow of income and a powerful tool for shaping the economy's productive capacity. Totaling hundreds of billions of pounds annually, public expenditure is divided into current spending on day-to-day services like the NHS, capital spending on long-term infrastructure, and transfer payments such as Universal Credit. Macro-economically, adjusting this expenditure allows the government to manage aggregate demand and smooth out the economic cycle. Micro-economically, it provides essential public goods, corrects market failures, and redistributes income to improve societal equity.

Fiscal Deficits and the National Debt

This revision video for AQA Economics looks at fiscal deficits and the National Debt. Government borrowing and the accumulated national debt—currently hovering around 95% of GDP—are defining challenges for the UK economy in 2026. The issue is no longer just the sheer size of the debt, but the cost of servicing it.