Question

A group of students is studying for an economics quiz about economic cycles and how the government manages in an economy. In a market economy, strategies that change spending or taxes in order to influence economic conditions are known as:

(1 point)

fiscal policy.


equity promotion.


monetary policy.


economic stimulus.

Answer 1

Fiscal policy.

Explanation: Fiscal policy refers to government decisions about spending and taxation to influence aggregate demand and economic conditions. (Monetary policy instead involves changing the money supply and interest rates.)