Expansionary fiscal policy is typically used to _____ aggregate demand in order to _____.
A) increase; avoid a recession
B) decrease; avoid a recession
C) increase; slow down an overheated economy
D) decrease; slow down an overheated economy

Question

Quizplus · Accepted Answer

Expansionary fiscal policy involves increasing government spending and/or decreasing taxes, which will increase aggregate demand. This policy is typically used to avoid or end a recession by increasing economic activity and creating jobs.

Expansionary Fiscal Policy Is Typically Used to _____ Aggregate Demand