What does fiscal policy relate to?

Fiscal policy refers specifically to the government's approach to managing the economy through its taxation and spending policies. This allows the government to influence overall economic activity, which can help achieve various macroeconomic objectives such as controlling inflation, encouraging job growth, and stimulating economic growth during periods of recession. By adjusting tax rates and modifying public expenditure, the government can either expand or contract economic activity, making fiscal policy a crucial tool for economic management.

In contrast, the other options focus on broader financial mechanisms or strategies that do not directly relate to the government's fiscal actions. Monetary control of banks pertains to how a country's central bank manages the money supply and interest rates, while regulation of stock market transactions deals with maintaining fair trading practices in the markets. Private investment strategies involve individual or corporate decisions on investing capital, which is also outside the scope of fiscal policy. Thus, the focus on government taxation and spending policies makes this answer the correct choice.