Which of the following is NOT a tool of fiscal policy?
Practice Questions
Q1
Which of the following is NOT a tool of fiscal policy?
Government spending
Taxation
Monetary supply control
Public debt management
Questions & Step-by-Step Solutions
Which of the following is NOT a tool of fiscal policy?
Step 1: Understand what fiscal policy is. Fiscal policy involves government spending and taxation decisions.
Step 2: Identify tools of fiscal policy. Common tools include government spending, tax cuts, and tax increases.
Step 3: Understand what monetary policy is. Monetary policy involves controlling the money supply and interest rates, usually managed by a central bank.
Step 4: Identify tools of monetary policy. Common tools include adjusting interest rates and controlling the money supply.
Step 5: Compare the tools. Determine which option is related to monetary policy instead of fiscal policy.
Step 6: Conclude that monetary supply control is NOT a tool of fiscal policy.
