ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The federal government can pursue economic policies such as spending or taxation to stimulate an economy that is contracting or to cool one that is expanding too rapidly. When the government acts to influence the economy in these ways, what is its goal?
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to maintain consumers’ freedom of choice
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to support self-regulation in the marketplace
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to encourage economic citizenship
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to promote stability in the business cycle
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Explanation:
Detailed explanation-1: -Fiscal policy is the use of government spending and taxation to influence the economy. Governments typically use fiscal policy to promote strong and sustainable growth and reduce poverty.
Detailed explanation-2: -Expansionary monetary policy is a macroeconomic tool that a central bank-like the Federal Reserve in the US-uses to stimulate economic growth.
Detailed explanation-3: -Fiscal policy is a government’s use of taxation and spending to influence the economy.
Detailed explanation-4: -What policies can the government of a free-market economy implement to stimulate economic growth? Enforce property rights, provide public education, have low taxes, fund infrastructure projects, to name a few.
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