Fiscal policy refers to the use of government taxes, spending, and borrowing to affect business fluctuations in the economy. Option A refers to only a small part of fiscal policy, while option B only focuses on the income distribution aspect of fiscal policy. Option D is describing monetary policy, which is different from fiscal policy.

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Fiscal Policy Is

Question 14

Multiple Choice

Fiscal policy is

A) government borrowing to finance the national debt.
B) government taxes and spending that affect the income distribution among people.
C) government taxes, spending, and borrowing that affect business fluctuations.
D) the change of the money supply that affects business fluctuations.

Correct Answer: