ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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decreasing taxes and increase government spending
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increase taxes and decrease government spending
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reducing the investment tax credit while raising the income tax
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balancing the budget
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Detailed explanation-1: -Understanding Expansionary Policy Expansionary policy is intended to boost business investment and consumer spending by injecting money into the economy either through direct government deficit spending or increased lending to businesses and consumers.
Detailed explanation-2: -Expansionary fiscal policy is defined as the policy that works towards promoting the consumption in the economy.
Detailed explanation-3: -Fiscal policy tools are used by governments to influence the economy. These primarily include changes to levels of taxation and government spending. To stimulate growth, taxes are lowered and spending is increased. This often involves borrowing by issuing government debt.
Detailed explanation-4: -Fiscal policy is the use of government spending and taxation to influence the economy. Governments typically use fiscal policy to promote strong and sustainable growth and reduce poverty.