Which of the following are features of fiscal policy?

(A) Taxes and government spending are tools of fiscal policy.

(B) It is implemented by the central bank.

(C) It influences aggregate demand.

(D) It involves adjustments in public debt.

Choose the correct answer from the options given below:

(A) Taxes and government spending are tools of fiscal policy -> TRUE. These are the primary instruments of fiscal policy.

(B) It is implemented by the central bank -> FALSE. Fiscal policy is implemented by the government (executive and legislature), not the central bank. The central bank implements monetary policy.

(C) It influences aggregate demand -> TRUE. Changes in government spending and taxes directly affect aggregate demand in the economy.

(D) It involves adjustments in public debt -> TRUE. Government borrowing to finance deficits or repaying debt through surpluses are integral parts of fiscal policy.

Hence, Option 2: (A), (C) and (D) only -> Fiscal policy is a government tool that uses taxation and spending to influence economic conditions. It affects aggregate demand and consequently impacts public debt levels. Statement (B) is incorrect because fiscal policy is implemented by the government, while monetary policy is handled by the central bank. Therefore, only statements A, C, and D correctly describe features of fiscal policy. -> correct