Fiscal policy is
A) a change in money supply designed to change total spending.
B) a change in interest rates designed to change total spending.
C) a change in government purchases or net taxes designed to change total spending.
D) a change in government regulations designed to change total spending.
E) a change in policy stance by the Federal Reserve designed to change total spending.

Question

Quizplus · Accepted Answer

Fiscal policy refers to changes in government purchases or net taxes that are designed to change total spending in the economy. This can involve increasing government spending or decreasing taxes in order to boost consumer or business spending, or decreasing government spending or increasing taxes in order to reduce spending and combat inflation. The other options are not accurate descriptions of fiscal policy. A refers to monetary policy, B refers to the actions of the Federal Reserve, and D refers to regulatory policy.

Fiscal Policy Is