In the long run, fiscal policy influences a. saving, investment, and growth; in the short run, fiscal policy primarily influences the aggregate demand for goods and services. b. saving, investment, and growth; in the short run, fiscal policy primarily influences technology and the production function. c. the aggregate demand for goods and services; in the short run, fiscal policy primarily influences technology and the production function. d. technology and the production function; in the short run, fiscal policy primarily influences saving, investment, and growth.

Question

Business

Fabian Hinton

27 September, 14:57

In the long run, fiscal policy influences a. saving, investment, and growth; in the short run, fiscal policy primarily influences the aggregate demand for goods and services. b. saving, investment, and growth; in the short run, fiscal policy primarily influences technology and the production function. c. the aggregate demand for goods and services; in the short run, fiscal policy primarily influences technology and the production function. d. technology and the production function; in the short run, fiscal policy primarily influences saving, investment, and growth.

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Answers (1)

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Denise Beltran · Answer 1

The correct option here is A).

Explanation:

Fiscal policy is a tool which is used by a government to influence the economy, through the changes in spending and taxation (of governments). This policy affects the economy in both short run and long run. Fiscal policy has its effect on aggregate demand for goods and services and is very much capable of influencing savings, investment and growth in the economy through its contractionary and expansionary fiscal policies. So thus from the above information it can be said that the option A is correct.