Answer:
The correct answer is option a.
Explanation:
Fiscal policy can be defined as a tool to make changes in the economic variables with the motive to stabilize economy. In fiscal policy the government makes changes in the its expenditure or tax rates.
Fiscal policy can be expansionary or contractionary. In case of expansionary policy, the government reduces tax rates or increases spending or both.
In case of contractionary policy, the taxes are increased or spending is reduced or both.
