Fiscal policy attempts to:
A) influence interest rates and credit conditions in order to stabilize investment.
B) alter exchange rates in order to eliminate trade deficits.
C) manage AD through changes in the government budget.
D) maintain competition through antitrust enforcement.

Question

Quizplus · Accepted Answer

Fiscal policy involves government spending and taxation decisions to manage aggregate demand (AD), aiming to achieve economic objectives like controlling inflation, stimulating economic growth, and reducing unemployment. Choices A and B are more closely related to monetary policy and exchange rate policy, respectively, while D pertains to competition policy.

Fiscal Policy Attempts To