What Are the Two Tools of Fiscal Policy That Governments

question 21

Multiple Choice

What are the two tools of fiscal policy that governments can use to affect the level of aggregate demand?

• A) government spending and taxation
• B) government spending and technology improvements
• C) taxation and controlling imports
• D) taxation and controlling exports

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Definitions:

Issuing Firm

An entity, typically a corporation, that offers securities or stocks to the public for the first time, typically through an initial public offering (IPO).

Equity Share

A share of ownership in a company, which entitles the shareholder to a claim on part of the company's assets and earnings.

Private Debt

Debt financing obtained from private sources rather than through a public market, often used by companies for growth or as an alternative to bank loans.

Financial Strength

A measure of a company or individual's ability to manage their debts and meet financial obligations.