Question

Fiscal policy is defined as changes in federal ________ and ________ to achieve macroeconomic objectives such as price stability, high rates of economic growth, and high employment. Group of answer choices taxes; expenditures taxes; interest rates interest rates; money supply taxes; the money supply

Answer 1

Answer:

expenditures and taxes

Explanation:

Fiscal policy refers to a government action to adjust taxes and expenditures to influence economic growth. Taxes are the main sources of income for the government. A rise in taxes increases revenue to the government but lower individual disposable income. High taxes discourage investments and business expansion.

Government expenditure in infrastructure and other projects creates employment and incomes in the economy. Reduced spending by the government may result in a lower aggregate demand. The government uses fiscal policies together with monetary policies to achieve its economic goals.