Fiscal policy involves
A) the use of tax and money policies by government to influence the level of interest rates.
B) the use of tax and spending policies by the government.
C) decreasing the role of the Federal Reserve in the everyday life of the economy.
D) the use of interest rates to influence the level of GDP.

Question

Quizplus · Accepted Answer

Fiscal policy involves the use of tax and spending policies by the government to influence the level of economic activity, including GDP, inflation, and employment. It is separate from monetary policy, which involves the use of interest rates and other tools by the Federal Reserve to influence the economy.

Fiscal Policy Involves