Which of these actions could be a result of effective fiscal policy?

An effective fiscal policy is aimed at influencing a country's economic performance through government spending and taxation. Stimulating economic growth through increased government spending is a primary action of fiscal policy. When the government invests in infrastructure projects, education, health care, or other public services, this can create jobs, increase consumer demand, and ultimately lead to a multiplier effect in the economy. As people earn wages from these projects, they spend more, further stimulating economic activity.

This process not only helps to boost the economic output but also can lead to increased tax revenues in the long run, which can help address issues such as the national debt. By effectively using government spending to increase economic activity, fiscal policy can be a powerful tool for growth.

In contrast, reducing the national debt without increasing taxes may be challenging and can depend on multiple economic factors, not just fiscal policies. Decreasing GDP to stabilize prices typically does not align with the objectives of effective fiscal policy since it counters the goal of promoting economic growth. Promoting monopolies undermines competition and can lead to higher prices and lower quality products, which is contrary to the objectives of fostering a healthy economy. Thus, the correct focus of an effective fiscal policy is on stimulating economic growth, making the action of increased government spending a