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    I don't know what the answer to this question is - any help please?

    Which one of the following is an example of fiscal policy? A decision by the government to

    A - Decrease the exchange rate
    B - Raise the minimum wage
    C - Increase its budget surplus
    D - Reduce the rate of interest

    Also, could you explain why? Thank you
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    The answer is C. Fiscal policy involves government adjusting taxation and/or government spending. So government increasing taxation and reducing its spending (contractionary policy) would lead to increasing its budget surplus.

    Hope that helps
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    (Original post by oli1395)
    The answer is C. Fiscal policy involves government adjusting taxation and/or government spending. So government increasing taxation and reducing its spending (contractionary policy) would lead to increasing its budget surplus.

    Hope that helps
    Thank you! I get it now
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    How I remember stuff like this is
    Fiscal is always government expenditure and tax
    Monetary is interest rate, money supply and exchange rate
    Supply is altering factors of productions in a way


    Just try spot out from the questions which is which
 
 
 
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