Which policies are expenditure-changing policies?
A) Currency devaluation and revaluation
B) Import quotas and tariffs
C) Monetary and fiscal policy
D) Wage and price controls

Question

Quizplus · Accepted Answer

Monetary and fiscal policy are both expenditure-changing policies. Monetary policy aims to control the money supply and interest rates in order to affect spending and inflation, while fiscal policy involves government spending and taxation to influence aggregate demand and the economy as a whole.

Currency devaluation and revaluation (A) are exchange rate policies and do not directly affect government expenditure. Import quotas and tariffs (B) are trade policies that can affect the prices of goods and the competitiveness of domestic producers, but they do not necessarily change government expenditure. Wage and price controls (D) are potentially expenditure-changing policies, but they are not widely used in contemporary economies and are not considered effective or appropriate by many economists.

Which Policies Are Expenditure-Changing Policies