What is fiscal policy?
A)It is the government's approach to its own spending and taxation.
B)It is the use of interest rate policy by the central bank to stabilize an economy.
C)It is the total spending by all levels of government.
D)It is the central bank's approach to interest rate policy.
E)It is employed by governments only when the economy is experiencing a recessionary gap.

Question

Quizplus · Accepted Answer

Fiscal policy refers to the government's approach to its own spending and taxation, including how it allocates funds and collects revenue. It is a tool used by governments to influence economic activity and can be expansionary (increasing spending and/or decreasing taxes to stimulate growth) or contractionary (decreasing spending and/or increasing taxes to slow down an overheated economy).

What Is Fiscal Policy