When the government decides to cut military spending, it is implementing a(n) policy.

When the government decides to cut military spending, it is implementing a(n) _fiscal policy.

Explanation:

The US Government usually influences the nation's economy by monitoring its spending levels and dishing out the tax rates.  This means used to control the economy is known as fiscal policy.  So when it cuts military spending, it is implementing a fiscal policy.  Fiscal policy is used together with monetary policy by the Federal Reserve to ensure that the economy heads toward the intended direction that the government wants to achieve.

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