In macroeconomics, what specific tool involves the use of government spending and taxation to influence a country's aggregate demand?
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Fiscal Policy
Fiscal policy is one of the two main tools used to steer a country's economy, the other being monetary policy. It is often used during recessions to 'prime the pump' by increasing government spending to stimulate job growth and consumer demand.
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- In macroeconomics, what term refers to the adjustment of government taxation and spending to impact aggregate demand?