Which government actions would be considered fiscal policy decisions?

Question

Social Studies

Kendra Robbins

29 July, 05:37

Which government actions would be considered fiscal policy decisions?

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Answers (1)

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Magnolia · Answer 1

1). Canceling a government-funded project because of a lessened need for job creation.

2). Cutting taxes to encourage commercial activity.

Explanation:

Fiscal policy is demonstrated as the government's policy in which it adjusts or manipulates its expenditure and tax rates in order to monitor and command the economy of the nation. The policy primarily intends to keep the economy stable.

As per the question, 'cancellation of government-funded project' would reduce government's expenditure and prevent the excess supply of money (to contract demand) in the economy to control inflation. While a 'cut in tax rates' would increase the flow of money in the economy and increase public borrowings and expenditure that would stimulate economic growth (cope up recession). Thus, options 1 and 2 are the correct answers.