Fiscal policy is enacted through changes in
A) interest rates and the price level.
B) the supply of money and foreign exchange.
C) unemployment and inﬂation.
D) taxation and government spending.

Question

Quizplus · Accepted Answer

Fiscal policy refers to the use of government spending and taxation to influence the economy. Therefore, the correct choice is D, taxation and government spending. Choices A, B, and C refer to monetary policy which is enacted by the central bank through changes in interest rates, money supply and foreign exchange.

Fiscal Policy Is Enacted Through Changes in