Expansionary fiscal policy involves

Question

Quizplus · Accepted Answer

Expansionary fiscal policy refers to increasing government spending and/or decreasing taxes in order to stimulate economic growth and increase aggregate demand. Option C is the only one that includes an increase in government spending and a decrease in taxes, both of which are associated with expansionary fiscal policy. The other options involve either a decrease in government spending (option D) or an increase in taxes (option B), which are contractionary fiscal policies.

Expansionary Fiscal Policy Involves