If the government cuts taxes to encourage people to spend more money to stimulate economic growth, it is using:

Question

Quizplus · Accepted Answer

Fiscal policy is a tool the government uses to affect the economy through taxing and spending in the budget. To get the economy to speed up, Congress could get more money flowing through the economy by either cutting taxes (leaving people with more money to spend) or increasing government spending (the government sends money to people or it buys things from private companies). To get the economy to slow down, Congress could reverse these measures.

If the Government Cuts Taxes to Encourage People to Spend