The fiscal policy tools include:?

(a) changes in the money supply and the interest rate.

(b) government spending and taxation policies.

(c) government regulation and user fees.

(d) government taxation and regulation.

Answer:
The answer is B. It uses government spending to either increase or decrease total spending in the economy because only the government can spend enough money to affect the economy as a whole (in the case of expansionary fiscal policy) and withdraw enough money to affect the economy as a whole (in the case of contractionary fiscal policy) same with taxation by increasing tax its removing money from the economy causing it to contract and by reducing it its increasing money in the economy causing it to expand.
The answer is B!!

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