Expansionary fiscal policy will cause the IS curve to shift to the right.

Name: Expansionary fiscal policy will cause the IS curve to shift to the right.
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Question

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Expansionary fiscal policy, such as increased government spending or tax cuts, will increase aggregate demand in the economy, causing an upward shift of the IS curve. This is because the policy will increase consumption and investment spending, leading to higher levels of output and income in the short run.

Expansionary Fiscal Policy Will Cause the IS Curve to Shift