The goal of expansionary fiscal policy is to shift the ________ curve to the ________.
A) aggregate demand; left
B) aggregate demand; right
C) short-run aggregate supply; right
D) short-run aggregate supply; left
E) long-run aggregate supply; left

Question

Quizplus · Accepted Answer

Expansionary fiscal policy aims to increase aggregate demand, which can be achieved by increasing government spending, reducing taxes, or a combination of the two. This shift in aggregate demand will cause the AD curve to shift to the right, resulting in higher output and prices in the short-run.

The Goal of Expansionary Fiscal Policy Is to Shift the ________