Fiscal policy typically consists of altering a) government spending and taxes. This approach involves the government adjusting its expenditure levels and adjusting tax rates to influence the economy. By increasing government spending, for example, a government can stimulate economic growth, while increasing taxes can help cool down an overheated economy.
Other options such as b) taxes and tariffs, c) government spending and investment, and d) government spending and the money supply do not fully encompass the main components of fiscal policy. Taxes and tariffs are primarily related to trade policy, while investment may be a result of fiscal policy but is not a defining component of it. Similarly, the money supply is primarily regulated by monetary policy, not fiscal policy.