Which of the following would be classified as fiscal policy?
A)The federal government passes tax cuts to encourage firms to reduce air pollution.
B)The Bank of Canada cuts interest rates to stimulate the economy.
C)A provincial government cuts taxes to help the economy of the province.
D)The federal government cuts taxes to stimulate the economy.
E)Provinces increase taxes to fund education.

Question

Quizplus · Accepted Answer

Fiscal policy refers to the use of government spending and taxation to influence the economy. Option D refers to the federal government cutting taxes as a way to stimulate the economy, which is an example of fiscal policy. The other options refer to monetary policy (B) or specific provincial policies (A and E) that do not involve a broad approach to government spending and taxation. Option C also involves tax cuts, but at a provincial level, which is not typically classified as fiscal policy.

Which of the Following Would Be Classified as Fiscal Policy