Question

In: Economics

Fiscal policy is best defined as government policy with respect to trade deficits. government policy with...

Fiscal policy is best defined as

government policy with respect to trade deficits.

government policy with respect to transfer payments such as social security benefit.

government spending and tax decisions driven by macroeconomic policy goals.

government policy to retire the federal debt.

Solutions

Expert Solution

Fiscal policy refers to the change in government variables like government spending, tax and subsidy to achieve various macroeconomic policy goals. Like to achieve higher growth rate, to correct business cycle problems, to control inflation and to achieve higher employment.

Fiscal policy is a government policy but not related to trade deficit or transfer payments.

So the correct answer:

Government spending and tax decisions driven by macroeconomic policy goals.

Rahul Sunny answered 2 years ago
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