ExpertEasy1 markMultiple Choice
Syllabus A: The business organisation and its external environmentSyllabus AMacroeconomicsFiscal Policy
ACCA · Question 37 · Syllabus A: The business organisation and its external environment
[Section A] True or False: Fiscal policy refers to the actions taken by a country's central bank to control the money supply and interest rates.
[Section A] True or False: Fiscal policy refers to the actions taken by a country's central bank to control the money supply and interest rates.
Answer options:
A.
True
B.
False
How to approach this question
Distinguish between the two main types of macroeconomic policy: Fiscal (Government) and Monetary (Central Bank).
Full Answer
B.False✓ Correct
Fiscal policy is the use of government revenue collection (taxes) and expenditure (spending) to influence a country's economy. Monetary policy is the process by which the monetary authority (central bank) controls the supply of money and interest rates.
Common mistakes
Mixing up Fiscal and Monetary policy.
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