alleryStart learning →What is fiscal policy?
AA programme of taxation and government spending
BA programme of interest rate and money supply control
CA programme of import tariffs and export restrictions
DA programme of price control on essential commodities
Answer & Solution
Correct answer: A. A programme of taxation and government spending
1. Fiscal policy is the government's programme of taxation and spending.
2. By cutting taxes or by increasing spending, the government can stimulate the economy.
3. The more the government buys from businesses, the greater their revenues and output.
4. Interest rates and the money supply belong to monetary policy, the other tool.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 1 "Understanding Economic Systems and Business", section 1.5 Achieving Macroeconomic Goals_
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