Fiscal policy can BEST be defined as the use of:
A) government expenditure and taxation to mitigate recessions only.
B) government expenditure,borrowing,and taxation to influence the business cycle.
C) money supply manipulation to influence the business cycle.
D) international political relations to influence the business cycle.

Question

Quizplus · Accepted Answer

Fiscal policy involves the use of government expenditure, borrowing, and taxation to influence the business cycle, which includes periods of economic growth, contraction, and stabilization. The objective of fiscal policy is to achieve full employment, price stability, and economic growth. By using different fiscal tools, such as increasing government spending or cutting taxes, the government can influence aggregate demand, which in turn affects economic activity.

Fiscal Policy Can BEST Be Defined as the Use Of