Which of the following measures is associated with an expansionary fiscal policy?

Question

Quizplus · Accepted Answer

Lowering taxes is associated with an expansionary fiscal policy, as it increases disposable income and encourages consumer spending and investment. Option A, lowering transfer payments, is associated with a contractionary fiscal policy, as it reduces government spending and decreases aggregate demand. Option C, lowering government purchases, is also associated with a contractionary fiscal policy, as it reduces government spending and aggregate demand. Option D, decreasing investments, can have mixed effects and may not necessarily be associated with either an expansionary or contractionary fiscal policy.

Which of the Following Measures Is Associated with an Expansionary