Which policy is an example of an expenditure-switching policy?
A) an increase in the money supply
B) a decrease in government spending
C) an increase in business taxes
D) a decrease in import tariffs

Question

Quizplus · Accepted Answer

A decrease in import tariffs would make domestic products relatively cheaper compared to foreign products, encouraging consumers to switch their expenditure from imports to domestic products. This is an example of an expenditure-switching policy. The other choices are not related to expenditure-switching policies.

Which Policy Is an Example of an Expenditure-Switching Policy