Fiscal policy
A)uses the tools of taxation and spending in an effort to address inflation and unemployment.
B)uses the tool of business regulation to increase economic efficiency.
C)uses the tool of interest rates to stimulate private savings.
D)uses the tool of the exchange rate to discourage imports.

Question

Quizplus · Accepted Answer

Fiscal policy refers to the government's use of taxation and spending to affect the economy. Specifically, it can be used to address issues of inflation and unemployment by increasing or decreasing government spending and taxation. Therefore, option A is the best choice. Option B refers to regulatory policy, not fiscal policy. Option C is targeted towards monetary policy, not fiscal policy. Option D is targeted towards trade policy, not fiscal policy.

Fiscal Policy