Canadian Securities Course (CSC) Practice Exam

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Which government policy involves control over government spending, taxation, borrowing, and the federal budget?

  1. Exchange rates

  2. Leading indicators

  3. Current account

  4. Fiscal policy

The correct answer is: Fiscal policy

Fiscal policy is a government's use of taxation and spending to influence economic activity. It involves controlling government spending, taxation, borrowing, and the federal budget. A. Exchange rates are not a government policy, but rather the value of one currency in relation to another. B. Leading indicators are used to forecast economic changes, not to directly control government policy. C. Current account refers to a country's import and export of goods and services, not government policies.

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