Senator Spendital made a speech deploring the continuous deficits in the federal budget.He is proposing an increase in tax rates to raise more revenue for the government and thus gradually reduce the size of the national debt over a period of several years.The strategy Senator Spendital is proposing is a common type of monetary policy.
Level of Learning 3: Application of principles

Question

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Senator Spendital's proposal to increase tax rates is a fiscal policy, not a monetary policy. Fiscal policy involves government spending and taxation decisions, while monetary policy involves managing the money supply and interest rates, typically conducted by a central bank.

Senator Spendital Made a Speech Deploring the Continuous Deficits in the Federal