ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Increasing government spending and lowering taxes
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Decreasing government spending and increasing taxes
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Increasing government spending and increasing taxes
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Decreasing government spending and lowering taxes
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Detailed explanation-1: -Expansionary fiscal policy is when the government increases the money supply in the economy using budgetary instruments to either raise spending or cut taxes-both having more money to invest for customers and companies.
Detailed explanation-2: -Which one of the choices below best describes an expansionary fiscal policy? Government spending increases, taxes decrease.
Detailed explanation-3: -Fiscal policy that increases aggregate demand directly through an increase in government spending is typically called expansionary or “loose.”
Detailed explanation-4: -Expansionary fiscal policy-an increase in government spending, a decrease in tax revenue, or a combination of the two-is expected to temporarily spur economic activity.
Detailed explanation-5: -Contractionary fiscal policy, on the other hand, is a measure to increase tax rates and decrease government spending. It occurs when government deficit spending is lower than usual.