Which one of the following would be an effective fiscal policy in raising national income and reducing unemployment?

A) Reducing transfer payments
B) A decrease in government expenditures
C) An increase in net taxes
D) Cutting back on unemployment benefits
E) A reduction in income taxes

Fiscal Policy

Government modifications of its expenditure levels and tax policies to observe and manage a country's economic condition.

National Income

The total amount of money earned within a country, including wages, rent, interest, and profit, reflecting the overall economic activity.

Unemployment

Refers to the situation where individuals who are capable of working and are actively seeking employment cannot find a job.