ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An example of expansionary is what? (Multiple answers-must pick all to receive credit)
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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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Explanation:
Detailed explanation-1: -The two major examples of expansionary fiscal policy are tax cuts and increased government spending.
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.
There is 1 question to complete.