Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increasing government spending to stimulate demand
B
Reducing taxes to decrease public debt
C
Implementing trade restrictions to boost local industry
D
Adjusting interest rates to control inflation
Understanding the Answer
Let's break down why this is correct
Answer
Fiscal policy refers to how the government uses its spending and taxation to influence the economy. When the government spends money on projects like building roads, schools, or healthcare, it creates jobs and helps businesses grow. This increased spending can lead to more people having money to spend, which boosts demand for goods and services. For example, if the government invests in renewable energy, it not only creates jobs in that sector but also encourages other businesses to invest in sustainable practices. Overall, effective fiscal policy helps create a healthier economy by ensuring resources are allocated where they are needed most.
Detailed Explanation
When the government spends more money, it creates jobs and helps businesses grow. Other options are incorrect because Some think that lowering taxes helps reduce debt; People might believe that trade restrictions help local businesses.
Key Concepts
Fiscal policy
Topic
Economic Growth and Resource Allocation
Difficulty
easy level question
Cognitive Level
understand
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