An increase in government transfers is an example of the _____ fiscal policy because it shifts the aggregate demand curve to the _____ aggregate output.
A) expansionary;left,increasing
B) contractionary;left,decreasing
C) expansionary;right,increasing
D) contractionary;right,decreasing

Question

Quizplus · Accepted Answer

An increase in government transfers is an expansionary fiscal policy because it increases disposable income for consumers, leading to higher consumption and shifting the aggregate demand curve to the right, thus increasing aggregate output.

An Increase in Government Transfers Is an Example of the _____