Historically, the government has used fiscal policy to affect the economy through
A)central planning.
B)indicative planning.
C)aggregate demand.
D)aggregate supply.

Question

Quizplus · Accepted Answer

Fiscal policy is the use of government spending and taxation to influence the economy. By changing taxes or government spending, the government can affect aggregate demand, which is the total amount of goods and services that consumers and businesses want to buy. This can in turn affect economic growth, employment, and inflation. Central planning and indicative planning are types of economic systems where the government controls production and allocation of resources, while aggregate supply refers to the total amount of goods and services that businesses are willing and able to produce.

Historically, the Government Has Used Fiscal Policy to Affect the Economy