Which of the following are components of fiscal policy?
A) transfer payments only
B) money supply and government purchases
C) government purchases only
D) government purchases, transfer payments, and taxes
E) taxes and money supply

Question

Quizplus · Accepted Answer

Fiscal policy refers to the government's decisions regarding its spending, taxation, and transfer payments. Therefore, options A, B, and E are incorrect as they only mention one component of fiscal policy. Option C mentions government purchases only, but ignores taxes and transfer payments, which are also important components of fiscal policy. Option D is correct as it includes all three components of fiscal policy: government purchases, transfer payments, and taxes.

Which of the Following Are Components of Fiscal Policy