If the government increases its spending or reduces its taxes in order to influence the level of economic activity,it is engaging in
A) regulatory policy
B) antitrust policy
C) monetary policy
D) fiscal policy
E) supply-management policy

Question

Quizplus · Accepted Answer

Fiscal policy refers to the actions taken by the government to influence the level of economic activity by changing its spending or tax rates. Regulatory policy is focused on creating and enforcing rules and regulations to ensure certain outcomes, such as safety or environmental protection. Antitrust policy is aimed at preventing monopolies and promoting competition in markets. Monetary policy involves managing the supply of money and credit in the economy through actions such as setting interest rates or buying and selling securities. Supply-management policy involves regulating the production and distribution of certain goods or services.

If the Government Increases Its Spending or Reduces Its Taxes