Question: What is "Fiscal Policy"? Is the fact that the Federal Reserve is raising interest rates a part of Fiscal Policy? Please select the BEST answer choices from the options provided.
Question: What is "Fiscal Policy"? Is the fact that the Federal Reserve is raising interest rates a part of Fiscal Policy? Please select the BEST answer choices from the options provided.
A) Yes, when the Federal Reserve increases interest rates the Fed is using fiscal policy to address an economic problem.
B) Fiscal policy has to do with the Federal Budget - federal spending and revenue. When the Federal Reserve increases interest rates, the higher interest rates make it more expensive for both public and private entities to borrow and spend. Therefore, spending, both government and private, will decrease. This is why, when the Federal Reserve raises interest rates it is "fiscal policy."
C) Yes, fiscal policy has to do with the budget and interest rates. Any action by the Federal Reserve regarding interest rates will be fiscal policy.
D) Fiscal Policy is the use of government spending and taxes to deal with the economy's problems such as slow growth, high
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