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Fiscal policy primarily refers to changes in

Group of answer choices

government spending or tax revenue.

the amount of money in circulation.

annual interest rates.

the availability of credit.

User Sidney
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1 Answer

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Answer:

government spending or tax revenue

Step-by-step explanation:

Fiscal policy is the use of taxes (revenues) and spending by the government to influence the economy's direction. When a government raises or decreases taxes and expenditures, it influences inflation, unemployment, and the money supply in the economy. Fiscal policy is used together with monetary policy to help meet the economic goals of a country.

An rise in business taxes reduces the profitability of companies, which discourages investments. A reduction in taxes increases investment and creates job opportunities.

A reduction in individual taxes increases the disposable income of people. This lead to an increase in aggregate demand. An increase in government spending through infrastructure development and other projects increases the aggregate demand.

User Jen R
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