Answer to Question #130829 in Macroeconomics for Sibusiso

Question #130829

Which one of the following statements regarding fiscal policy and the budget is correct

A when the government plans to stimulate economic activity, it can increase spending or reduce taxes

B revenue from tax is always greater than government spending in south africa

C demand management only refers to fiscal policy

D a contractionary fiscal policy should be implemented to combat unemployment

Expert's answer

A. when the government plans to stimulate economic activity, it can increase spending or reduce taxes.