Question

The process by which the government manages spending and taxes to influence the direction of the economy is ?

Answer 1

The process by which the government manages spending and taxes to influence the direction of the economy is? Fiscal policy. Fiscal policy is when the government will just the spending levels and tax rates to help the nation's economy level out. When the banks control the supply of money that is called a monetary policy.

Answer 2

The correct answer is fiscal policy.

The process where government manages taxes and spending in order to influence economy direction is known as fiscal policy.

Fiscal policy is where government uses expenditure and revenue so as to influence economy.

Some examples of fiscal policy include increased government spendings and tax cuts. They both contribute and aggregate demands to deficits.

They are applied when there is recession. Fiscal policy stabilizes the economic growth rate, economic stability, and maintain full employment condition.

The main purpose of the fiscal policy is that it accelerates the capital rate of investment and formation.