Question

Which action is an example of the government pursuing a fiscal policy?

The central bank increases the money supply.

The Federal Reserve decreases the money supply.

Congress increases income tax rates.

The Federal Reserve engages in open-market operations.

Answer 1

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

Answer 2

There are numerous examples of the government pursuing a fiscal policy. However, only a few choices are listed with this questions. The action from the choices that is a great example is "congress increases income tax rates."