Expansionary fiscal policy includes an increase in government spending,a decrease in taxes or some combination of the two.

Question

Quizplus · Accepted Answer

Expansionary fiscal policy is designed to increase aggregate demand and stimulate economic growth. This can be achieved through increased government spending or tax cuts, both of which put more money into the hands of consumers and businesses, encouraging them to spend and invest more. Therefore, option A is correct; expansionary fiscal policy includes an increase in government spending, a decrease in taxes, or a combination of the two.

Expansionary Fiscal Policy Includes an Increase in Government Spending,a Decrease