The idea that expansionary fiscal policy has a positive affect on investment is known as
A)monetary policy.
B)crowding out.
C)the investment accelerator.
D)the multiplier.

Question

Quizplus · Accepted Answer

The idea that expansionary fiscal policy, in which the government increases spending or reduces taxes, will stimulate investment and economic growth is known as the investment accelerator. This theory suggests that an increase in aggregate demand, caused by government spending or tax cuts, will lead to a corresponding increase in investment spending by firms.

The Idea That Expansionary Fiscal Policy Has a Positive Affect