Expansionary fiscal policy _____
A) is a fiscal policy used to close a recessionary gap.
B) is a revenue and spending program in the federal budget that automatically adjusts with the ups and downs of the economy.
C) is an emergency manipulation of government purchases, transfer payments, and taxes to promote macroeconomic goals.
D) is a revenue and spending program in the federal budget that never adjusts with the ups and downs of the economy.
E) is a monetary policy change.

Question

Quizplus · Accepted Answer

Expansionary fiscal policy is used to close a recessionary gap, which means it involves increasing government spending or reducing taxes to stimulate the economy during a recession. Options B and D refer to automatic stabilizers, while option C refers to discretionary fiscal policy. Option E is incorrect, as expansionary fiscal policy is a fiscal policy, not a monetary policy.

Expansionary Fiscal Policy _____