Fiscal policy is

Question

Fiscal policy is

Quizplus · Accepted Answer

Fiscal policy refers to the government's use of taxation and spending to influence the economy. This policy is designed to stabilize and improve the economy by controlling inflation, promoting economic growth, and reducing unemployment. Fiscal policy can be expansionary, which involves increasing government spending and cutting taxes to stimulate economic growth, or contractionary, which involves decreasing government spending and increasing taxes to combat inflation. The selling of government bonds by the Treasury (A) is a monetary policy tool used by the Federal Reserve, while the deliberate manipulation of the money supply to affect the interest rate (B) is also a monetary policy tool. Selling foreign exchange reserves to change the exchange rate (D) is a policy used to manage currency values and is not directly related to the domestic economy.

Fiscal Policy Is