In the face of unstable economic growth due to a recession or accelerating inflation, the potential problems of high public debt include increased income inequality, reduced economic incentives, and crowding out private investment. 1. What is fiscal policy, its function and its effects on economic fluctuations in the short and long term (uses the model of demand and supply). 2. Explain each of the tools that exist in expansionary fiscal policy and contractionary fiscal policy. 3. Express in detail the effects of expansionary and contractionary fiscal policy on income and the price level. 4. Using the premise presented as a basis, argue about the intervention of fiscal policy as an instrument to promote growth, sustainability and economic stability of a country. (Provides an example in detail.)