Question

Congress must vote whether to increase the government budget so as not to shut down the government this year The vote passed and the budget ceiling has been increased to keep the government running. This is an example of what type of policy? a. macroeconomic monetary policy b. microeconomic monetary policy c. macroeconomic fiscal policy

Answer 1

Answer:

The answer is C. macroeconomic fiscal policy

Explanation:

Though both monetary policy and fiscal policy are used to control economic activities of a nation over time i.e they both can be used to accelerate growth when an economy begins to decline and to moderate growth when an economy starts to overheat.

Monetary policy is mainly used by Central bank of every nation. The central bank are responsible for its operation. These policy influences the quantity of money in the economy.

While fiscal policy involves the use of government spending and government revenue (e.g tax revenue) to affects economy e.g government can raise spending or lower tax when the economy activity is slowing down and decrease spending or increase tax when an economy is in peak or boom period.

Every year government proposes budget which contains its spending and revenue.