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Government Spending as a Tool

A government'...

Question

A government's policy related to its income, expenditure and debt is called ______.

A

fiscal policy

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B

revenue policy

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C

monetary policy

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D

interest rate policy

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Solution

The correct option is C fiscal policy

Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy through which a central bank influences a nation's money supply.

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