Which of the following is an expansionary fiscal policy?
A)an increase in the money supply that decreases interest rates
B)an increase in taxes that reduces the budget deficit and decreases consumption
C)a decrease in government spending
D)an increase in unemployment benefits

Question

Quizplus · Accepted Answer

An increase in unemployment benefits is an expansionary fiscal policy as it increases the disposable income of the unemployed, thereby increasing their consumption and aggregate demand. In general, expansionary fiscal policy involves increasing government spending or reducing taxes to stimulate economic growth and combat recession.

Which of the Following Is an Expansionary Fiscal Policy