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What does the term 'fiscal policy' refer to?

Practice Questions

Q1
What does the term 'fiscal policy' refer to?
  1. Government spending and taxation decisions
  2. Central bank interest rate adjustments
  3. Regulation of financial markets
  4. Control of money supply

Questions & Step-by-Step Solutions

What does the term 'fiscal policy' refer to?
  • Step 1: Understand that 'fiscal policy' is about how the government manages money.
  • Step 2: Recognize that it includes two main actions: spending money and collecting taxes.
  • Step 3: Know that the government uses these actions to help control the economy, like boosting growth or reducing inflation.
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