Suppose Congress decreases income taxes.This is an example of
A) expansionary fiscal policy.
B) expansionary monetary policy.
C) contractionary fiscal policy.
D) contractionary monetary policy.

Question

Quizplus · Accepted Answer

Decreasing income taxes would lead to an increase in disposable income and therefore an increase in consumer spending. This is an example of expansionary fiscal policy, which aims to stimulate economic growth by increasing aggregate demand.

Suppose Congress Decreases Income Taxes