Question

Fiscal policy refers to:_____________.

a. efforts to balance a government's budget.
b. changes in the money supply to achieve particular economic goals.
c. changes in government expenditures and taxation to achieve particular economic goals.
d. the change in private expenditures that occurs as a consequence of changes in government
spending

Answer 1

c. Changes in government expenditures and taxation to achieve particular economic goals.

Step-by-step explanation:

Fiscal policy is the government tool by which the government alters its spending and the taxation to influence the aggregate demand in the economy.

An expansionary fiscal policy involves means to increase aggregate demand and can include increased government spending and lower taxes. A contractionary monetary policy is used when the government aims to reduce the aggregate demand and thus can either reduce its spending or raise taxes.

Money supply is influenced by monetary policy and other options are wrong and irrelevant to the fiscal policy definition.

Hope that helps.