The use of taxing and spending powers to shape the economy is part of ________ policy.
A) fiscal
B) monetary
C) regulatory
D) distributive
E) redistributive

Question

Quizplus · Accepted Answer

Taxing and spending powers are both tools of fiscal policy, which is the government's use of fiscal measures (taxation and spending) to influence and stabilize the economy. Monetary policy (B) refers to the government's management of the money supply and interest rates, while regulatory policy (C) deals with laws and regulations to manage specific industries or sectors. Distributive policy (D) refers to government efforts to allocate benefits to different groups within society, and redistributive policy (E) refers to government efforts to redistribute wealth and income. While taxing and spending powers can be used for both distributive and redistributive purposes, they are primarily associated with fiscal policy.

The Use of Taxing and Spending Powers to Shape the Economy