When the government increases spending or decreases taxes to stimulate the economy toward expansion,the government is conducting:

Question

Quizplus · Accepted Answer

When the government increases spending or decreases taxes, it is conducting expansionary fiscal policy. This is because it involves actions by the government to increase aggregate demand and stimulate economic growth, which is achieved through increasing government expenditure or decreasing taxation.

When the Government Increases Spending or Decreases Taxes to Stimulate