Answer: Distributing income and wealth among different segments of the population

## Explanation Fiscal policy refers to the use of government spending and taxation to influence the economy. The primary objectives of fiscal policy typically include: 1. **Redistributing income and wealth** - This is achieved through progressive taxation systems and targeted government spending on social programs, which is exactly what option C describes. 2. **Stabilizing the economy** - Using fiscal tools to smooth out economic cycles (recessions and booms) 3. **Promoting economic growth** - Through infrastructure spending and investment incentives 4. **Providing public goods and services** - That the private sector may not adequately supply **Why the other options are incorrect:** - **Option A (Maintaining price stability)**: This is primarily the objective of **monetary policy**, not fiscal policy. Central banks use monetary tools like interest rates to control inflation and maintain price stability. - **Option B (Achieving an exchange rate target)**: This is also primarily the domain of **monetary policy** and sometimes direct intervention by central banks in foreign exchange markets. While fiscal policy can indirectly affect exchange rates through its impact on interest rates and economic growth, it is not a primary objective. **Key Distinction:** - **Fiscal Policy**: Government spending and taxation → focuses on income distribution, economic stabilization, and growth - **Monetary Policy**: Central bank actions on money supply and interest rates → focuses on price stability, exchange rates, and financial stability Therefore, among the given options, redistributing income and wealth is the most direct and likely objective of fiscal policy.

Author: LeetQuiz .