Using expansionary policies to combat a recession would

Question

Quizplus · Accepted Answer

Expansionary policies involve increasing government spending and/or decreasing taxes to stimulate economic growth. This typically results in an increase in the budget deficit as the government is spending more than it is bringing in through revenue. Option B is incorrect because expansionary policies would not increase a budget surplus. Option C is incorrect because expansionary policies involve increasing discretionary spending, not decreasing it. Option D is incorrect because while expansionary policies may lead to increased economic activity and higher tax revenues in the long run, in the short term they are likely to decrease federal revenue as taxes are lowered.

Using Expansionary Policies to Combat a Recession Would