Fiscal policy involves
A) decreasing the role of the Federal Reserve in the everyday life of the economy.
B) the use of tax and money policies by government to influence the level of interest rates.
C) the use of tax and spending policies by the government.
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 economy. This can include changes in tax rates, government spending, and transfer payments to affect levels of aggregate demand, economic growth, and inflation. Choices A, B, and D involve monetary policy, which is the use of interest rates and other monetary tools by the Federal Reserve to influence the economy.

Fiscal Policy Involves