Asked by Justin Kaleb Driggers on Mar 10, 2024



If government cuts taxes to encourage people to spend more money in order to stimulate economic growth, what policy is it engaging in?

A) Fiscal policy
B) Business cycling
C) Monetary policy
D) Keynesian policy
E) Subsidies

Fiscal Policy

Refers to the use of government spending and taxation policies to influence the economy.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured as a percentage increase in real gross domestic product (GDP).

  • Identify the consequences of government actions on economic equilibrium, encompassing both fiscal and monetary strategies.

Verified Answer

Lady Ann Alquizar

Mar 10, 2024

Final Answer :
Explanation :
The government is engaging in fiscal policy by cutting taxes to stimulate economic growth. Fiscal policy refers to the use of government spending, taxes, and borrowing to influence the economy.