Question

which of the following is an example of a fiscal policy? A) the goernment passes a universal tax credit to stimulate consumer spending during an economic downturn B) the government lowerrs intrest rates to make it cheaper for people and businesses to borrow money C) The government passes a tax on companies who emit greenhouses gasses into the atmosphere D) the government gives a tax break to special interest groups who regularly donate large sums to political compaigns

Answer 1

Answer:

The correct answer is letter "A": the government passes a universal tax credit to stimulate consumer spending during an economic downturn.

Explanation:

Fiscal policy refers to the collective governmental decisions concerning taxation and spending of a nation. The term fiscal policy is identified with the British economist John Maynard Keynes (1883-1946) who claimed that governments could control rates of macroeconomic growth by doing things like raising the rate of employment, battling inflation and flattening business cycles.

Thus, a governmental universal tax credit to boost consumption is likely to be taken care of a fiscal policy.

Answer 2

Answer: A) the goernment passes a universal tax credit to stimulate consumer spending during an economic downturn

Explanation:

this is the process in which the government regulate it financial spending and tax rate in order to balance the economic rate during the economic downturn. In this process the government might increase the tax rate or introduce different policy at a particular period of downturn so as to tackle unemployment rate or inflation in the country. This is also related to monetary policy in which the Central Bank will control the monetary flow in the economy.