What is fiscal policy primarily concerned with?

Fiscal policy is primarily concerned with government spending and tax policies. This is because fiscal policy refers to the use of government expenditures and tax revenues to influence the economy. When the government adjusts its levels of spending and taxation, it can affect overall economic activity.

For example, increasing government spending can stimulate economic growth by creating jobs and increasing demand for goods and services. Conversely, increasing taxes can reduce consumer spending and help cool off an overheating economy. The balance between these elements is crucial in managing economic stability, promoting growth, and addressing unemployment or inflation.

Other options, while relevant to economic policy, do not fall under the definition of fiscal policy. Government intervention in foreign trade relates more to trade policy, regulating interest rates is a function of monetary policy typically managed by central banks, and controlling the value of currency also falls under monetary policy. Thus, the core focus of fiscal policy is indeed on government spending and taxation.