In the United States, who enacts fiscal policy (changes in government spending and taxation)?

• A. Private commercial banks by changing reserve requirements
• B. Congress and the President (the federal government)
• C. The Bureau of Labor Statistics by adjusting inflation calculations
• D. The Federal Reserve through open market operations

Answer: (B)

Verified step by step guidance

1. Understand that fiscal policy involves government decisions on taxation and government spending to influence the economy.
2. Identify the key institutions involved in economic policy: Congress, the President, the Federal Reserve, private banks, and the Bureau of Labor Statistics.
3. Recall that fiscal policy is enacted by the federal government, specifically through legislation passed by Congress and signed by the President.
4. Recognize that the Federal Reserve controls monetary policy, which includes tools like open market operations and reserve requirements, not fiscal policy.
5. Conclude that the correct answer is Congress and the President, as they have the authority to change government spending and taxation.