Typical fiscal policy focuses squarely on shifting ________ to change the economy.

Question

Quizplus · Accepted Answer

Fiscal policy is typically used to influence aggregate demand in the economy, which refers to the total amount of goods and services that households, businesses, and governments want to buy at any given time. By changing government spending and/or taxes, policymakers can affect aggregate demand and therefore stimulate or slow down economic growth. Short-run and long-run aggregate supply, on the other hand, refer to the amount of goods and services that producers are willing and able to supply at different price levels, and they are not typically the focus of fiscal policy.

Typical Fiscal Policy Focuses Squarely on Shifting ________ to Change