Fiscal policy is

Question

Fiscal policy is

Quizplus · Accepted Answer

Fiscal policy refers to the use of government spending, taxation and transfer payments to influence the aggregate output, employment, and prices in the economy. It is focused on achieving macroeconomic objectives (such as promoting economic growth, reducing unemployment or controlling inflation) by managing the federal budget. It is different from monetary policy, which is controlled by the Bank of Canada and influences the money supply, interest rates, and credit conditions to achieve economic goals. Thus, choice A, D and E are incorrect. Choice C is also incorrect because fiscal policy can be effective regardless of whether the government has a budget surplus or deficit.

Fiscal Policy Is