Which of the following is an example of a fiscal policy?
A) The Bank of Canada takes action to increase the money supply during an economic recession.
B) The federal government increases infrastructure spending during an economic recession.
C) The Bank of Canada decreases interest rates during an economic recession.
D) Businesses begin to lay off employees and cut back on spending during an economic recession.

Question

Quizplus · Accepted Answer

Fiscal policy refers to the actions taken by the government to influence the economy through either spending or taxation. In this case, the federal government increasing infrastructure spending during an economic recession is an example of fiscal policy. Option A is an example of monetary policy, which involves actions taken by the central bank to influence the money supply and interest rates. Option C is also an example of monetary policy. Option D is a description of the result of a recession rather than a government action.

Which of the Following Is an Example of a Fiscal