The tendency of the tax and spending policies embodied in a government's budget to expand or contract the economy. This involves comparisons with a normal budgetary position. It is argued that a government's fiscal stance cannot be inferred purely from its actual spending and tax revenues, as these are affected by fluctuations in activity. The fiscal stance should therefore be found by comparing the full employment budget surplus or deficit with some normal level. This type of measurement of fiscal stance can only be carried out with the use of a model of how national income changes are reflected in government spending and tax revenues.

• local authority housing
• local content
• local government
• local maximum
• local minimum
• location
• lock-out
• locomotive principle
• logarithm
• logarithmic scale
• logistic curve
• log-linear function
• log-normal distribution
• log-rolling
• Lomé Convention
• London Inter Bank Offered Rate
• London International Financial Futures and Options Exchange
• long-dated security
• long position
• long rate
• long run
• long-run average cost
• long-run marginal cost
• long-run Phillips curve
• long-term interest rate