Question

Which situation most directly illustrates a possible outcome of a fiscal policy?

Answer 1

Answer: B. The amount of federal money available to support education decreases.

Step-by-step explanation:

The Fiscal policy of a Government relates to the spending and taxation policies of that Government in an effort to control the direction of the Economy.

Normally there are two types of Fiscal Policy: Expansionary and Contractionary. Expansionary fiscal policy works by the Government increasing spending and/ or cutting taxes so that consumers in the economy have more money.

Contractionary policy is the opposite and involves Government spending reducing and/ or taxes increasing. Reducing the amount of Federal money available for education is a possible product of Contractionary fiscal policy.