Question

Which situation most directly illustrates a possible outcome of a fiscal
policy?
A. New environmental regulations make drinking water in a city safer.
B. The government decides it is time to print a great deal of new
money
O C. Struggling farmers receive less assistance from the government.
O D. A company decides to expand its operations into several new
states

Answer 1

Answer:

C

Explanation:

Answer 2

The correct answer would be option C that says that the struggling farmers receive less assistance from the government as fiscal policies are associated with determining the expenses and taxation policies to the various sectors to regulate the direction of the economy.

There are two types of Fiscal Policy that are Expansionary and Contractionary.

Expansionary fiscal policy:

• deals with an increase in spending and/ or relaxing in taxation by the government so that consumers in the economy get more money.

Contractionary policy:

• deals with reducing spending and/ or increasing taxation.

In this case, farmers did not get assistance from the government due to reducing the amount of Federal money available for farming and farmers is an illustration of Contractionary fiscal policy.

Learn more about Fiscal policy:

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