ECONOMICS

Question 3 of 10

Which fiscal policy would most likely result in the largest budget deficit?

A. Low taxation and low spending

B. Low taxation and high spending

C. High taxation and low spending

D. High taxation and high spending

The employment of government spending and taxation to impact the economy is known as fiscal policy. Fiscal policy is often used by governments to foster robust and sustained growth while also reducing poverty.

This is in contrast to monetary policy, which is implemented by central banks or other monetary authorities.

Low taxation and high spending are the fiscal policies that are most likely to result in the highest budget deficit.

So, option B. is correct.

Find out more information about fiscal policy here:

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ECONOMICS Question 3 of 10 Which fiscal policy would most likely result in the largest budget deficit? A. Low taxation and low spending B. Low taxation and high spending C. High taxation and low spending D. High taxation and high spending

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What is fiscal policy?

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ECONOMICS

Question 3 of 10

Which fiscal policy would most likely result in the largest budget deficit?

A. Low taxation and low spending

B. Low taxation and high spending

C. High taxation and low spending

D. High taxation and high spending