If the government wants to jump-start the economy resulting in more consumer spending, it will raise taxes.

Question

Quizplus · Accepted Answer

Fiscal policy refers to the federal government's efforts to keep the economy stable by increasing or decreasing taxes or government spending. When the government raises taxes, the result is a tightening of consumer and business spending, which has the tendency of slowing the economy. This draws money away from the private sector.

If the Government Wants to Jump-Start the Economy Resulting in More