What Is the Purpose of Fiscal Policy

question 126

Multiple Choice

What is the purpose of fiscal policy?  

• A) Fiscal policy uses the federal government's powers over spending and taxation to affect employment, the price level, and GDP. 
• B) Fiscal policy uses the federal government's powers over the money supply and interest rates to affect employment, the price level, and GDP. 
• C) Fiscal policy uses the federal government's powers over spending and taxation to affect employment and prices, but NOT to affect the level of GDP. 
• D) Fiscal policy uses the federal government's powers over spending and taxation to affect employment and the level of GDP, but NOT to affect the price level.

---

Definitions:

Unknown Value

A value in a dataset or an equation that is not known or has not been determined.

Statistical Method

A collection of mathematical procedures and principles used for analyzing, interpreting, and presenting empirical data.

Equation

A mathematical statement indicating that two expressions represent the same value.

Variables

Elements, features, or factors that are likely to change or vary within the context of a mathematical function or statistical experiment.