SIE (Securities Industry Essentials) Practice Exam

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What are United States government budgetary and taxation policies collectively known as?

Monetary policy
Fiscal policy
Economic policy
Social policy

The correct answer is: Fiscal policy

Fiscal policy refers to the government's decisions and actions related to spending, borrowing, and taxation. These policies are used to achieve economic goals such as controlling inflation, promoting economic growth, and reducing government debt. Option A, monetary policy, primarily focuses on regulating the money supply and interest rates to achieve economic stability. Option C, economic policy, is a broader term that encompasses both monetary and fiscal policies, along with other measures related to economic management. Option D, social policy, refers to government actions that aim to address social issues and promote social welfare, such as healthcare and education.