If the government undertakes expansionary fiscal policy, it:

Question

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Expansionary fiscal policy involves increasing government spending and/or decreasing taxes, which leads to more money being available for consumers and businesses to spend. As a result, aggregate demand is expected to increase, leading to economic growth. Option A is not necessarily true as income taxes may decrease instead of increase. Option C is incorrect as the goal of expansionary fiscal policy is to increase aggregate demand, not decrease it. Option D is incorrect as the government cannot force individuals to change their spending patterns.

If the Government Undertakes Expansionary Fiscal Policy, It