True or False? As a percentage of GDP. the total U.S. public debt is the highest such debt among the world's advanced industrial nations. The total public debt is more relevant to an economy than the public debt as a percentage of GDP. Lowering taxes would help a government reduce an inflationary output gap. The so-called recognition lag associated with fiscal policy is a result of how slowly the U.S. Congress moves. The impact of an expansionary fiscal policy may be strengthened if it crowds out some private investment spending. [Choose] [Choose] [Choose] [Choose] [Choose] > >

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Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.