Final answer:
Fiscal policy concerns Texas's revenue-raising activities and resource spending, focusing on taxation, government spending, and borrowing.
Step-by-step explanation:
The type of policy relating to Texas's activities for raising revenue and spending resources is known as fiscal policy. This policy includes decisions on taxation, government spending, and borrowing. In Texas, a significant portion of state spending is allocated towards healthcare and education, as depicted by data showing the largest categories of state expenditure.
To balance the budget, Texas may increase revenues through various taxes, reflecting a common government practice. However, determining the most effective tax policy involves weighing the need for revenue against the potential negative effects on residents' spending and the broader economy.
Fiscal policy also considers the impact on economic growth or decline. When spending exceeds tax collections, it leads to a budget deficit; conversely, more tax revenue than expenditures results in a budget surplus. A balanced budget occurs when spending equals taxation. These fiscal decisions are crucial as they influence levels of employment, output, and price stability within the state.