ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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supply-side fiscal policy
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demand-side fiscal policy
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automatic stabilizers
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discretionary fiscal policy
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Detailed explanation-1: -Increased government spending is likely to cause a rise in aggregate demand (AD). This can lead to higher growth in the short-term. It can also potentially lead to inflation.
Detailed explanation-2: -Fiscal policy that increases aggregate demand directly through an increase in government spending is typically called expansionary or “loose.”
Detailed explanation-3: -Answer. Fiscal policies are the policies that are framed for using government spending and taxation to stress the economic status of the economy. These policies are major influencers for aggregate demand, employment rate, inflation, and economic prosperity.
Detailed explanation-4: -A demand-side policy is an economic policy focused on increasing or decreasing aggregate demand to influence unemployment, real output, and the price level in the economy. Demand-side policies include fiscal policies that involve taxation and/or government spending adjustments.