Fiscal policy refers to the use of government spending and taxation to influence the economy. It is a tool used to achieve macroeconomic outcomes such as stabilizing economic growth, reducing unemployment, and controlling inflation. Therefore, option A is the correct answer. The other options are incorrect as they do not accurately define fiscal policy.

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Fiscal Policy Is

Question 29

Multiple Choice

Fiscal policy is

A) the use of government spending and taxes to achieve macroeconomic outcomes.
B) any policy by the Bank of Canada.
C) budgeting policy by consumer households.
D) any policy by the government or Bank of Canada to control inflation.
E) risky due to long lags between changes in interest rates and the impact on real GDP.

Correct Answer: