Question

Which factor is NOT a tool of fiscal policy? (Select All that Apply) A. changing the tax rates B. government purchases of goods and services C. changes in the money supply D. changes in the interest rate to affect the money supply

Answer 1

Answer: Government purchases of goods and services can not be termed a Fiscal Policy.

Explanation: Fiscal Policy refers to the actions of the government to influence the economy. Government purchases of goods and services can not be termed a Fiscal Policy because it does not affect the money supply and flow of money within the economy. Changes in tax rates, changes in money supply, and changes in interest rates play a vital role in influencing the economy as a whole and prove to be a successful Fiscal Policy.