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One of the major macroeconomic goals of any economy of the world is to use macroeconomic policies to maintain a healthy balance of payment position in order to safe guard the external value of national currency. There are two major tools of macroeconomic policies: monetary and fiscal policies. They are otherwise known as economic stabilization or demand management policy and are used to reduce variations in aggregate spending which are important causes of fluctuations in economic activity . Of great concern in this study is the fiscal policy. It refers to changes in government expenditures, taxes, or both. Fiscal policy is expansionary if government expenditures are increased and/or taxes reduced while fiscal policy is contractionary if government expenditures reduced and/or taxes increased.
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