All of the following are tools of fiscal policy except one.Which is the exception?

A) Taxes
B) Transfer payments
C) Interest rates
D) Government purchases of goods
E) Government purchases of services

Question

All of the following are tools of fiscal policy except one.Which is the exception?A) TaxesB) Transfer paymentsC) Interest ratesD) Government purchases of goodsE) Government purchases of services

Kenny Zhong · Accepted Answer

Final Answer : C, Explanation :  Interest rates are a tool of monetary policy, not fiscal policy. Fiscal policy refers to the decisions made by the government regarding government spending and taxation, while monetary policy involves centrally-managed tools such as interest rates and money supply to regulate the economy. The other options listed (taxes, transfer payments, government purchases of goods, and government purchases of services) are all tools of fiscal policy.

All of the following are tools of fiscal policy except one.Which is the exception?

A) Taxes
B) Transfer payments
C) Interest rates
D) Government purchases of goods
E) Government purchases of services

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