The meaning of the quotation, \"Every government has a fiscal policy, whether it

Question

The meaning of the quotation, "Every government has a fiscal policy, whether it realizes if or not," is best expressed by which of the following statements?

Every government must decide on a tax and expenditure program, and this will influence the economy and the components of GDP.

In many cases, decisions to spend money must be made even though the expenditure runs contrary to the policy indicated.

Every government must make decisions about the quantity of money in the economy, and this will influence credit conditions and the rate of interest.

Every government is forced to do something about recessions and inflation, whether it wants to or not.

Explanation / Answer

Every government must make decisions about the quantity of money in the economy, and this will influence credit conditions and the rate of interest.

Government spending policies that influence macroeconomic conditions. Through fiscal policy, regulators attempt to improve unemployment rates, control inflation, stabilize business cycles and influence interest rates in an effort to control the economy. Fiscal policy is largely based on the ideas of British economist John Maynard Keynes (1883

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