Fiscal policy that increases the budget deficit has the same impact upon equilibrium output as does a(n):
A)contractionary monetary policy
B)increase in saving
C)decrease in investment
D)increase in imports
E)decrease in imports

Question

Quizplus · Accepted Answer

An increase in the budget deficit typically involves increased government spending or reduced taxes, which boosts aggregate demand and equilibrium output. Similarly, a decrease in imports increases net exports, also boosting aggregate demand and equilibrium output.

Fiscal Policy That Increases the Budget Deficit Has the Same