The goal of expansionary fiscal policy is to increase:
A) The price level
B) Aggregate supply
C) Real GDP
D) Unemployment

Question

Quizplus · Accepted Answer

Expansionary fiscal policy is designed to stimulate economic growth by increasing government spending or reducing taxes, which in turn boosts aggregate demand and leads to an increase in real GDP. The other options are incorrect because expansionary fiscal policy is intended to decrease, not increase, unemployment, increase, not decrease, the price level, and has no impact on aggregate supply.

The Goal of Expansionary Fiscal Policy Is to Increase