Fiscal policy is:
What will be an ideal response?
the use of government spending and taxes to influence the economy.
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If the Federal Reserve conducts an open market sale, the
A) interest rate will decrease. B) interest rate will increase. C) interest rate will not change. D) money supply is increased.
An increase in government spending lowers interest rates and increases the rate of investment in new capital
Indicate whether the statement is true or false
Tight monetary policy and easy fiscal policy lead to
A) high real interest rates. B) low real interest rates. C) roughly unchanged real interest rates. D) roughly unchanged real interest rates only when Ricardian equivalence holds; otherwise, low real interest rates.
If a good has the quality that its benefits cannot be denied to anyone, then that good is
a. nonrival b. merit c. exclusive d. nonexclusive e. social