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    Question

    Which of the following is associated with fiscal policy?

    A Inflation Correct Answer Incorrect Answer
    B Taxation Correct Answer Incorrect Answer
    C Consumption Correct Answer Incorrect Answer
    D Money supply Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are changes in the level and composition of taxation and government spending in various sectors.

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