Economists who are in favor of an increase in the size and scope of government tend to prefer ________________ when expansionary _______________ policy is needed to raise aggregate demand.

Question

Quizplus · Accepted Answer

Economists who believe in an increase in the size and scope of government tend to favor more government spending when expansionary fiscal policy is needed to raise aggregate demand. This approach believes that increasing government spending will stimulate economic growth and create jobs, leading to higher overall demand in the economy. Tax cuts, on the other hand, are seen as a less effective way to boost demand as they may simply lead to increased savings rather than spending. Monetary policy is also not typically favored as a tool for increasing aggregate demand by these economists, as it relies on interest rate manipulation rather than direct government spending.

Economists Who Are in Favor of an Increase in the Size