What does fiscal policy utilize to achieve economic objectives?

Fiscal policy utilizes the Commonwealth government budget to achieve economic objectives. This involves the government's decisions regarding taxation and public spending. By adjusting spending levels and tax rates, the government seeks to influence overall economic activity, regulate inflation, encourage employment, and stimulate economic growth.

For instance, if the government decides to increase its spending on infrastructure projects, this can lead to job creation and increased demand for materials, which can stimulate growth in the economy. Conversely, during periods of high inflation, the government might choose to decrease spending or increase taxes to cool down the economy.

The other options provided do not directly represent fiscal policy. Central bank interest rates pertain to monetary policy, which is the domain of the central bank and focuses on managing money supply and interest rates rather than government expenditure and taxation. Private sector investment and consumer spending are influenced by fiscal policy but are not direct tools used by the government to implement fiscal policy measures. The government’s use of its budget is the primary means by which it controls and affects economic conditions through fiscal measures.