This diagram shows a government's approach to taxing and spending. Which of the following would be a good title for this diagram?

Government Spending

The National Economy

The Federal Debt

Fiscal Policy

The correct answer is Fiscal Policy.

Fiscal Policy refers to the government's spending and taxing. It is the means by which the government adjusts its spending levels and tax rates to monitor and influence the nation's economy. It influences the economy using the money supply and interest rates. The objective of fiscal policy is to create healthy economic growth.

Government Spending means spending only, without taxing. The National Economy is a broad term describing the whole economy of a nation. The Federal Debt is the sum of all the debts owned by the federal government.