One possible fiscal policy objective is: A) to control the money supply to achieve equilibrium at Y_P. B) to increase the country's exports in order to increase AD. C) to stabilize AD at the level necessary for equilibrium at Y_P. D) to reduce the size of the government sector in the economy.

Question

Quizplus · Accepted Answer

Fiscal policy aims to stabilize aggregate demand (AD) to achieve economic equilibrium at potential output (Y_P), ensuring full employment and stable prices.

One Possible Fiscal Policy Objective Is