Question

State whether the following statement is true or false. 

Fiscal policy is related to public revenue and public expenditure. 

Options

• True

• False

Answer 1

Fiscal policy is related to public revenue and public expenditure. - True

Explanation:  Yes. The above statement is correct. Fiscal policy refers to the policy undertaken by the government to influence the economy through the process of public expenditure (government expenditure, subsidies and transfer payments) and public revenue collection (taxation). In other words, fiscal policy refers to a policy whereby the government alters its expenditure and revenue receipts.