Which of the following represent expansionary fiscal policy?
A)a reduction in government spending
B)an increase in average individual income tax rates
C)a cut in corporate income tax rates
D)an increase in marginal individual income tax rates

Question

Quizplus · Accepted Answer

Expansionary fiscal policy includes increasing government spending and/or reducing taxes in order to stimulate economic growth. Of the options given, only choice C represents a reduction in taxes, specifically the corporate income tax, which could potentially encourage businesses to invest and expand, ultimately leading to job growth and increased economic activity. The other options represent contractionary fiscal policy, which would have the opposite effect on the economy.

Which of the Following Represent Expansionary Fiscal Policy