The use of spending and taxes by the government to influence aggregate demand is known as
A)monetary policy.
B)governmental policy.
C)administrative policy.
D)fiscal policy.
E)federal policy.

Question

Quizplus · Accepted Answer

Fiscal policy refers to the use of government spending and taxation to influence the level of aggregate demand in the economy. Monetary policy, on the other hand, refers to the use of interest rates and money supply to influence economic activity. Governmental policy, administrative policy, and federal policy are all general terms that could refer to a wide range of government actions and policies, and are not specific to influencing aggregate demand.

The Use of Spending and Taxes by the Government to Influence