What is fiscal policy? A. Fiscal policy can be described as changes in government spending and interest rates to achieve macroeconomic policy objectives. B. Fiscal policy can be described as changes in interest rates to achieve macroeconomic policy objectives. C. Fiscal policy can be described as changes in interest rates and taxes to achieve macroeconomic policy objectives. D. Fiscal policy can be described as changes in government spending and taxes to achieve macroeconomic policy objectives.

Option (D) is correct.

Explanation:

Fiscal policy refers to the policy in which government uses government expenditure and taxes to achieve the macroeconomic goals. It is used to alter the output and unemployment level in an economy. Government can use expansionary or contractionary fiscal policy according to the situation. In a expansionary fiscal policy, there is an increase in the government spending and decrease in the taxes. In a contractionary fiscal policy, there is a fall in the government spending and an increase in the taxes.