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Questions and Answers
Which of the following best describes fiscal policy?
Which of the following best describes fiscal policy?
- The control of inflation and unemployment rates
- The management of interest rates and money supply by the central bank
- The management of government spending and taxation to influence the overall economy (correct)
- The regulation of financial institutions and markets
Which of the following best describes monetary policy?
Which of the following best describes monetary policy?
- The management of interest rates and money supply by the central bank (correct)
- The management of government spending and taxation to influence the overall economy
- The control of inflation and unemployment rates
- The regulation of financial institutions and markets
What is the main difference between fiscal and monetary policy?
What is the main difference between fiscal and monetary policy?
- Fiscal policy involves government spending and taxation, while monetary policy involves interest rates and money supply (correct)
- Fiscal policy focuses on interest rates, while monetary policy focuses on government spending
- Fiscal policy involves managing the money supply, while monetary policy involves managing government revenues
- Fiscal policy is controlled by the central bank, while monetary policy is controlled by the government
