Question

The government uses fiscal policy to manage the economy by

Answer 1

spending tax money during difficult economic times.

Step-by-step explanation:

just took the test on

Answer 2

Controlling the rate of inflation.

Step-by-step explanation:

Fiscal policy basically mean that the government will make some adjustment to their spending and tax rates depending on the current economic situation.

Inflation tend to cause the average price of consumer product become more expensive. The government can influence the rate of inflation through their fiscal policy.

When the government increase the amount of tax, it will reduce the amount of money circulated in the market and lower the rate of inflation. As a result, the price of consumers product will become more affordable for the people.