Setting government spending and taxes in an effort to change overall spending in an economy is use of:

Question

Quizplus · Accepted Answer

Fiscal policy is the use of government spending and taxation to influence the economy. By adjusting government spending and taxes, policymakers can affect the level of aggregate demand, which in turn affects the levels of output, employment, and prices in the economy. Monetary policy, on the other hand, involves the use of interest rates and other monetary tools to influence the economy. Investment and the stock market are related to fiscal and monetary policies but are not the primary tools used by policymakers to manage the economy.

Setting Government Spending and Taxes in an Effort to Change