Other things being equal,which of the policies will have the most expansionary effect on the economy?

Question

Quizplus · Accepted Answer

A budget deficit financed by creating new money increases the money supply, which leads to increased spending and aggregate demand, thus having the most expansionary effect on the economy. A balanced budget, budget surplus held as an idle money balance or budget surplus used for debt retirement do not directly increase the money supply, thus they are less expansionary.

Other Things Being Equal,which of the Policies Will Have the Most