Question

he government increasing/decreasing its spending and/or increasing/decreasing tax rates would have to do with ________________. *

Answer 1

Answer:

Fiscal policies

Explanation:

Fiscal policies are the actions of the government of adjusting taxes and expenditure to achieve desired macroeconomics objectives. The government's spending and taxation activities have a great influence on the level of economic activities in the country.

The government has the objective of maintaining stable prices, a low inflation rate,  a low unemployment rate, and steady economic growth. Through its various agencies, the government receives data showing the parameters of each of the macroeconomic variables.  Depending on the state of the economy, the government adjusts taxes and spending to achieve desired objectives.