In 2009, Congress passed a bill that involved government spending increases and tax cuts with the purpose of stimulating the U.S. economy. This policy is an example of

Question

Quizplus · Accepted Answer

The policy described involved increased government spending and tax cuts, both of which are instruments of expansionary fiscal policy. The aim of such policies is to stimulate the economy by increasing demand for goods and services, creating jobs, and raising consumer and investor confidence. This is in contrast to contractionary fiscal policy, which involves decreasing government spending and increasing taxes, with the intent of reducing inflation and dampening economic growth. Automatic stabilizers, on the other hand, are policies that automatically adjust government spending and tax revenues in response to changes in economic conditions, without the need for explicit legislative action. Expansionary monetary policy, meanwhile, involves actions taken by the central bank to lower interest rates, increase the money supply, and stimulate borrowing and spending.

In 2009, Congress Passed a Bill That Involved Government Spending