Fiscal policy
A)uses the federal government's powers of spending and taxation to affect employment,the price level,and GDP
B)uses the federal government's powers over the money supply and interest rates to affect employment,the price level,and GDP
C)can affect employment and prices,but not the level of GDP
D)can affect employment and the level of GDP,but not the price level
E)is most effective when employed by state governments rather than by the federal government

Question

Quizplus · Accepted Answer

Fiscal policy refers to the government's use of spending and taxation to influence the economy. By adjusting taxes and government spending, the government can impact the overall level of demand in the economy, which can affect employment, prices, and GDP. Therefore, choice A is the best answer.

Fiscal Policy