The government uses a fiscal policy to manage the economy by deciding whether more spending is required in order to support the national or regional economy in which it operates. Hence, the option C holds true.
What is the significance of a fiscal policy?
A policy, which is implemented for a fixed period and at regular intervals in an economy by the authorities such as government, is known as a fiscal policy. It is used to look and manage after the finances of the economy.
The government is the sole authority to operate and manage finances of an economy, and thus, uses its due diligence to decide whether it has to change its spending patterns in order to support the economy, and bring economic stability alongside growth and development at the same time.
Hence, option C holds true regarding the significance of a fiscal policy.
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