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) interest rates

Question

Quizplus · Accepted Answer

Fiscal policy refers to the government's use of taxation and spending to influence the economy. By changing taxes or government spending, the government can impact aggregate demand, which refers to the total amount of goods and services that all consumers, businesses, and the government are willing and able to buy at various price levels. Therefore, the correct answer is B - government spending and taxes.

Fiscal Policy Refers to the Idea That Aggregate Demand Is