Question

2. The government's fiscal policy denotes the use of government's
(A) taxes and expenditure
(B) consumption and investment
(c) taxes and revenue
(D) consumption and expenditure​

Answer 1

Answer:

Option A. Taxes and expenditure

Answer 2

Answer :

A) taxes and expenditure. Fiscal policy refers to the use of government's revenue and expenditure to influence the economy. The government can use its power to collect taxes and to spend money to influence the economy's direction, growth, and stability.

Explanation :

Fiscal policy is the use of government spending and taxation to influence the economy. By adjusting government spending and taxation, policymakers can affect the overall level of demand in the economy. When the government increases spending or decreases taxes, it puts more money into people's pockets, increasing demand and boosting economic activity. Conversely, when the government reduces spending or increases taxes, it reduces demand and slows economic activity.

The other options listed are not accurate descriptions of fiscal policy. Consumption and investment refer to components of GDP, not government policy. Taxes and revenue are related to government finances but do not necessarily refer to the use of government policy to influence the economy. Consumption and expenditure are also components of GDP, not government policy.

Overall, fiscal policy is an important tool for policymakers to manage the economy, and it is achieved by adjusting government spending and taxation.

In conclusion, (A) taxes and expenditure is the correct answer for the government's fiscal policy, which refers to the use of government spending and taxation to influence the economy.

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