The purpose of fiscal policy should be to
A)balance the budget to be fiscally responsible.
B)balance aggregate supply and aggregate demand.
C)keep taxes low to keep voters happy.
D)minimize government spending to avoid wasting money.

Question

Quizplus · Accepted Answer

The purpose of fiscal policy is to balance aggregate supply and aggregate demand, which helps to stabilize the economy, promote economic growth, and reduce inflation. While balancing the budget and minimizing government spending are important considerations, they should not be the sole focus of fiscal policy. Additionally, keeping taxes low to appease voters may be politically attractive, but it can lead to budget deficits and economic instability in the long-term.

The Purpose of Fiscal Policy Should Be to