Fiscal policy is used by government to influence the lever of aggregate demand in the economy ,in an effort to achieve economic objectives of aggregate full employment spending and tax rates are the best ways to stimulate aggregate demand. This can be used in times of recession or low economic activity as an essential tool in providing the framework for strong economic growth and working toward full employment .The government can implement these deficit – spending policies due to its size and prestige and stimulate trade. In theory ,these deficits would be paid for by an expanded economy during the boom that would follow; this was the reasoning behind the new deal.