Government taxation policies, called fiscal policy, have a certain flexibility. In times of a weak economy, taxes may be lowered temporarily to stimulate the economy.

Question

Quizplus · Accepted Answer

This statement is true. Government taxation policies can be adjusted to promote economic growth during times of weakness. One way to do this is by temporarily reducing taxes to encourage consumer spending and business investment.

Government Taxation Policies, Called Fiscal Policy, Have a Certain Flexibility