Which of the following is NOT a component of fiscal policy?
Practice Questions
Q1
Which of the following is NOT a component of fiscal policy?
Government spending
Taxation
Monetary supply
Transfer payments
Questions & Step-by-Step Solutions
Which of the following is NOT a component of fiscal policy?
Step 1: Understand what fiscal policy is. Fiscal policy involves government actions related to spending and taxation.
Step 2: Identify the components of fiscal policy. The main components are government spending, taxation, and transfer payments (like social security).
Step 3: Recognize what monetary policy is. Monetary policy deals with the money supply and interest rates, managed by a central bank.
Step 4: Determine which option is NOT part of fiscal policy. Since monetary supply is related to monetary policy, it is NOT a component of fiscal policy.
