Question

Identify all of the statements that are examples of fiscal policy.

A) Decreasing interest rates by the central bank
B) Increasing government spending on infrastructure
C) Adjusting income tax rates
D) Enforcing regulations on pollution control

Answer 1

Fiscal policy examples include increasing government spending on infrastructure and adjusting income tax rates. Decreasing interest rates and enforcing pollution control regulations are not examples of fiscal policy.

Step-by-step explanation:

Examples of fiscal policy include:

• B) Increasing government spending on infrastructure: This is an example of expansionary fiscal policy, as it involves increasing government spending to stimulate economic growth and create jobs.
• C) Adjusting income tax rates: This is an example of fiscal policy, as it involves changing tax rates to influence consumer spending and overall economic activity.

Examples that are not related to fiscal policy:

• A) Decreasing interest rates by the central bank: This is an example of monetary policy, as it is a tool used by the central bank to influence the money supply and interest rates.
• D) Enforcing regulations on pollution control: This is an example of regulatory policy, as it involves implementing rules and regulations to protect the environment and public health.