Fiscal policy includes
A) only increases and decreases to taxes.
B) only increases and decreases to government spending.
C) increases and decreases to both taxes and government spending.
D) only decreases in taxes and increases in government spending.
E) only increases in taxes and decreases in government spending.

Question

Quizplus · Accepted Answer

Fiscal policy involves both changes in government spending and changes in taxation to influence the economy. It can be expansionary (increasing spending and/or cutting taxes) or contractionary (decreasing spending and/or raising taxes) depending on the goals of policymakers.

Fiscal Policy Includes