Fiscal policy refers to the idea that aggregate demand is affected by changes in

A) the money supply.
B) government spending and taxes.
C) trade policy.
D) interest rates.

Fiscal Policy

The employment of expenditure and tax policies by a government to affect economic conditions.

Government Spending

Expenditures made by the government sector on goods and services, including salaries of public servants, public investments, and social security benefits.

Aggregate Demand

The collective requirement for goods and services in an economy, determined at a particular price point over a defined period.