5. The federal government cuts taxes to stimulate the economy can be classified as fiscal policy.
<h3>Which of the following is a form of fiscal policy?</h3>
Fiscal policy refers to how the government uses taxes, spending, and transfer payments to support stability and growth in the economy. combats both inflation and unemployment, but not simultaneously. To boost the economy, the federal government lowers taxes. taxation and spending by the government that automatically rise or fall with the economy. The fiscal policy entails adjustments to taxes or expenditures in order to achieve economic objectives.
6. When the economy enters a recession, your employer is unlikely to reduce your wages because output and input prices generally fall during recession.
7. Automatic stabilizers refer to government spending and taxes that automatically increase or decrease along with the business cycle.
8. Before the Great Depression of the 1930s, the majority of government spending took place at the place at the State and local levels and after the Great Depression the majority of government spending took place at federal level.
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