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MC Question 16

Governments have a number of economic targets as part of their fiscal policy.

Which of the following government actions relate predominantly to fiscal policy?

1 Decreasing interest rates in order to stimulate consumer spending
2 Reducing taxation while maintaining public spending
3 Using official foreign currency reserves to buy the domestic currency
4 Borrowing money from the capital markets and spending it on public works

A. 1 only
B. 1 and 3
C. 2 and 4 only
D. 2, 3 and 4

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