The use of government spending and taxation for the purpose of stabilizing the economy is called

A) budget policy.
B) monetary policy.
C) fiscal policy.
D) trade policy.

Fiscal policy refers to the use of government spending and taxation to influence the economy. It is aimed at stabilizing the economy by managing aggregate demand, growth, and employment levels. Budget policy refers to a government's budgetary decisions and plans, but it is not as comprehensive as fiscal policy. Monetary policy, on the other hand, pertains to the management of money supply, credit, and interest rates by the central bank to influence economic conditions. Trade policy involves a government's decisions on international trade agreements, tariffs, and quotas.