This review research paper aims to explore the impact of government fiscal policy on aggregate demand and economic stability. It seeks to provide a comprehensive understanding of the theoretical framework, examine various design and methodology approaches, and present key findings on the relationship between government fiscal policy and macroeconomic variables. The paper investigates the theoretical foundations that underpin the link between government fiscal policy and aggregate demand. It analyzes prominent economic theories and models, including Keynesian economics, the fiscal multiplier effect, and Ricardian equivalence, to establish a conceptual framework for understanding the dynamics between fiscal policy and macroeconomic outcomes. The study employs a systematic literature review approach, analyzing a wide range of empirical studies, economic models, and policy analyses. It incorporates both qualitative and quantitative research methods to synthesize existing findings and identify patterns, trends, and divergent perspectives on the effects of government fiscal policy on aggregate demand and economic stability. The research reveals that government fiscal policy plays a crucial role in influencing aggregate demand and economic stability. Expansionary fiscal policies, such as increased government spending and tax cuts, can stimulate aggregate demand and economic growth, particularly in times of recession or downturns. However, the effectiveness of fiscal policy depends on various factors, including the state of the economy, the level of public debt, monetary policy coordination, and the efficiency of government spending. The findings have important implications for policymakers, economists, and society as a whole. Understanding the effects of government fiscal policy on aggregate demand and economic stability can help guide policymakers in formulating effective fiscal measures to stabilize the economy, mitigate recessions, and promote sustainable growth. Moreover, this research contributes to the broader discourse on macroeconomic policy by highlighting the importance of fiscal policy in managing economic fluctuations and ensuring social welfare. This review research paper provides a comprehensive analysis of the effects of government fiscal policy on aggregate demand and economic stability. By synthesizing existing literature and examining various methodologies, it offers valuable insights into the theoretical foundations, empirical evidence, and practical implications of fiscal policy in macroeconomic management. This study contributes to the originality and value of the literature by presenting a holistic overview and identifying avenues for further research.