Fiscal policy is most effective when people are otherwise unwilling to spend money.

Question

Quizplus · Accepted Answer

Fiscal policy involves government spending and taxation to influence the economy. When people are unwilling to spend money on their own, government spending can stimulate demand and provide a boost to the economy. This is why fiscal policy is most effective during times of economic downturn or recession, when consumer spending is low.

Fiscal Policy Is Most Effective When People Are Otherwise Unwilling