The objective of an expansionary fiscal policy is to
A) reduce unemployment.
B) reduce inflation.
C) reduce growth in output.
D) reduce growth in international trade.

Question

Quizplus · Accepted Answer

An expansionary fiscal policy aims to increase government spending and/or decrease taxes, which leads to an increase in aggregate demand and, in turn, leads to increased production and employment. Therefore, the objective of an expansionary fiscal policy is to reduce unemployment.

The Objective of an Expansionary Fiscal Policy Is to