The Difference Between Fiscal Policy and Monetary Policy Is That

question 94

Multiple Choice

The difference between fiscal policy and monetary policy is that:

• A)fiscal policy is a macroeconomic policy but monetary policy is a microeconomic policy.
• B)monetary policy is a macroeconomic policy but fiscal policy is a microeconomic policy.
• C)fiscal policy involves regulation of natural monopolies but monetary policy involves the provision of public goods.
• D)monetary policy involves regulation of the money supply but fiscal policy involves government spending and taxing.
• E)fiscal policy involves the promotion of competition but monetary policy involves collecting money to pay for taxes.

---

Definitions:

Profit Maximization

The strategy of adjusting production and sales to achieve the maximum possible profits.

Input Increases

A situation where the amount, quality, or number of resources used in production grows, potentially leading to an increase in output.

Marginal Product

The additional output that is produced by adding one more unit of a specific input, ceteris paribus.

Production Function

An equation, graph, or table that describes the maximum amount of output a firm can produce from a given set of inputs.