What is fiscal policy primarily concerned with?

Fiscal policy primarily concerns itself with controlling national income through government spending and taxation. This approach is utilized by the government to influence the overall economic activity within a country. By adjusting spending levels and tax rates, a government can directly affect how much money consumers have to spend, which in turn can stimulate or restrain economic growth.

When the government increases spending or decreases taxes, it puts more money into the hands of consumers and businesses, which can boost demand and lead to higher levels of production, employment, and income. Conversely, by cutting spending or raising taxes, the government can cool down an overheating economy, control inflation, and help stabilize economic cycles.

The other options relate to different aspects of economic management. Regulating interest rates is primarily the role of central banks through monetary policy. Managing foreign trade agreements involves international trade policies, while enforcing labor laws pertains to worker rights and conditions, neither of which fall within the primary scope of fiscal policy. Thus, the correct option encapsulates the central focus of fiscal policy in an economy.