ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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borrowing is up, and many loans are being made
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many businesses are closing down
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unemployment is in the normal 4-5% range
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inflation has doubled in the last two quarters
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Detailed explanation-1: -Expansionary fiscal policy is used to prevent or end recessions, or to prevent high unemployment. The Economic Stimulus Act of 2008 allowed the government to put money directly into consumers’ pockets in the hope of stimulating spending.
Detailed explanation-2: -Expansionary Fiscal Policy: This type of fiscal policy is used when things get too slow, commonly during a recession, and the government wants to fuel growth. Government spending increases and tax rates drop. Unemployment falls as jobs open up and more people jump back into the workforce.
Detailed explanation-3: -Expansionary policy is a type of macroeconomic policy that is implemented to stimulate the economy and promote economic growth. Expansionary policies are used by central banks in times of economic downturns to reduce the adverse impact on the economy.
Detailed explanation-4: -Expansionary policy would most likely be used during a r or (peak, trough) phase. A contractionary policy would most likely be employed near the (peak, trough) of the business cycle as the economy reaches full-employment GDP and the potential for inflation accelerates. Transcribed Image Text:2.