The federal government raises corporate taxes in order to reduce the budget deficit.This is an example of the government using _____ policy as a tool to _____ economic activities.

Question

Quizplus · Accepted Answer

The statement mentions that the government is using corporate taxes to reduce the budget deficit, which is a clear indication of fiscal policy. Fiscal policy refers to the government's use of taxation and spending to influence the economy. In this case, the government is increasing corporate taxes to control the deficit, which will decrease economic activities since corporations will have less money to spend on investments and growth. Therefore, option D is the most appropriate answer. Options A, B, and C are incorrect since they do not align with the statement provided.

The Federal Government Raises Corporate Taxes in Order to Reduce