Expansionary fiscal measures, such as more government spending and tax cuts designed to reduce unemployment, are called:
A)fiscal austerity.
B)fiscal stimulus.
C)automatic stabilizers.
D)maturity transformation.

Question

Quizplus · Accepted Answer

Expansionary fiscal measures are designed to stimulate the economy and reduce unemployment by increasing government spending and cutting taxes. This is known as fiscal stimulus. Option A, fiscal austerity, is the opposite of expansionary measures, which aim to reduce government spending and increase taxes to combat inflation. Option C, automatic stabilizers, refer to features of the economy that automatically stabilize economic fluctuations without any explicit government intervention. Option D, maturity transformation, refers to the process of using short-term liabilities to fund long-term assets, which can be a risky financial strategy for banks.

Expansionary Fiscal Measures, Such as More Government Spending and Tax