Government spending conducted for the purpose of achieving full employment, price stability, or economic growth is an example of
A)monetary policy.
B)interest-rate policy.
C)exchange-rate policy.
D)fiscal policy.

Question

Quizplus · Accepted Answer

Fiscal policy refers to the use of government spending and taxation to influence the economy. The government can increase its spending to create jobs and promote economic growth, which in turn can lead to full employment and price stability. Therefore, government spending conducted for these purposes is an example of fiscal policy. Monetary policy, on the other hand, refers to the actions taken by a central bank to manage the supply and demand of money and credit in the economy, while interest-rate policy and exchange-rate policy are subsets of monetary policy.

Government Spending Conducted for the Purpose of Achieving Full Employment