In the context of U.S. macroeconomics, who has primary authority over fiscal policy (government spending and taxation decisions)?

• A. The International Monetary Fund, through enforcement of global fiscal rules
• B. The Bureau of Labor Statistics, through measurement of unemployment and inflation
• C. Congress and the President, through the legislative and budget process
• D. The Federal Reserve, through open market operations and the federal funds rate

Answer: (C)

Verified step by step guidance

1. Understand that fiscal policy refers to government decisions about spending and taxation, which influence the overall economy.
2. Recognize that fiscal policy is primarily determined by the government branches responsible for creating laws and budgets.
3. Identify the key institutions involved: Congress (the legislative branch) and the President (the executive branch) collaborate to pass budgets and tax laws.
4. Note that other entities like the Federal Reserve influence monetary policy, not fiscal policy, through tools like open market operations and interest rates.
5. Conclude that the primary authority over fiscal policy in the U.S. lies with Congress and the President, as they control government spending and taxation decisions through the legislative and budget process.