An increase in tax rates is an example of ________ policy, while the government influencing banks to lend more to consumers is an example of ________ policy.
A) GDP; GNP
B) fiscal; monetary
C) GNP; GDP
D) monetary; fiscal
E) none of these

Question

Quizplus · Accepted Answer

An increase in tax rates falls under fiscal policy, which involves changes in government spending and taxation to influence the economy. On the other hand, the government influencing banks to lend more to consumers falls under monetary policy, which involves changes in interest rates and the money supply to influence the economy.

An Increase in Tax Rates Is an Example of ________