BUSINESS ADMINISTRATION
BUSINESS POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Decrease taxes
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Raise taxes
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Government spends more on Science research
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Government cuts organizations like the National Science Foundation
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Detailed explanation-1: -The two major examples of expansionary fiscal policy are tax cuts and increased government spending. Both of these policies are intended to increase aggregate demand while contributing to deficits or drawing down budget surpluses.
Detailed explanation-2: -Decreasing the discount rate. Purchasing government securities. Reducing the reserve requirement.
Detailed explanation-3: -The Federal Reserve has three expansionary monetary policy methods: lowering interest rates, decreasing banks’ reserve requirements, and buying government securities.
Detailed explanation-4: -Buying bonds is a tool of expansionary monetary policy because buying bonds will lead to an increase in output. Buying bonds increases the money supply to decrease interest rates.