Fiscal policy refers to the idea that aggregate demand is changed by changes in what?
A)the money supply
B)government spending and taxes
C)trade policy
D)exchange rates

Question

Quizplus · Accepted Answer

Fiscal policy refers to the use of government spending and taxation to influence the economy. By increasing government spending or decreasing taxes, aggregate demand can be increased, leading to economic growth. Conversely, by decreasing government spending or increasing taxes, aggregate demand can be decreased, helping to combat inflation. The other options given (A, C, and D) refer to other types of economic policies that can also affect aggregate demand, but they are not specific to fiscal policy.

Fiscal Policy Refers to the Idea That Aggregate Demand Is