Fiscal policy can be either discretionary or automatic, which means it can be programmed to respond to changes in the economy, or it can be changed at the discretion of policymakers. Unlike monetary policy, which is set by the Federal Reserve, fiscal policy is determined by the government, specifically the Congress and the President, and uses government spending and taxation to influence the economy.

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Fiscal Policy

Question 266

Multiple Choice

Fiscal policy

A) uses the same means as monetary policy to attain the same goals.
B) is carried out by the Congress only.
C) can be discretionary or automatic.
D) uses the same means as monetary policy to accomplish an entirely different set of goals.

Correct Answer: