ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the power to tax
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the power to spend
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the power to borrow money
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the power to print money
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Detailed explanation-1: -The two major fiscal policy tools that the U.S. government uses to influence the nation’s economic activity are tax rates and government spending.
Detailed explanation-2: -The government possesses two major fiscal tools for influencing the economy. These tools can be divided into spending tools and revenue tools. Spending tools refer to the overall government spending. On the other hand, revenue tools refer to taxes collected by the government.
Detailed explanation-3: -The three main components of the Fiscal Policy of any country are – government receipts (revenue and capital), government expenditure (revenue and capital) and public debt.
Detailed explanation-4: -The tools of fiscal policy are taxes, expenditure, public debt and a nation’s budget.