Expansionary fiscal policy leads to a ________.
A) rightward shift of the labor demand curve
B) leftward shift of the labor demand curve
C) rightward shift of the labor supply curve
D) leftward shift of the labor supply curve

Question

Quizplus · Accepted Answer

Expansionary fiscal policy increases government spending and decreases taxes, leading to an increase in aggregate demand. This increase in aggregate demand leads to an increase in output and employment, resulting in a rightward shift of the labor demand curve.

Expansionary Fiscal Policy Leads to a ________