ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -It entails the government spending more money, lowering taxes or both. The goal of expansionary fiscal policy is to put more money in the hands of consumers so they spend more to stimulate the economy.

Detailed explanation-2: -Expansionary fiscal policy tools include increasing government spending, decreasing taxes, or increasing government transfers. Doing any of these things will increase aggregate demand, leading to a higher output, higher employment, and a higher price level.

Detailed explanation-3: -Expansionary fiscal policy is defined as the policy that works towards promoting the consumption in the economy.

Detailed explanation-4: -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-5: -For example, Keynesian economists would advocate deficit spending on labor-intensive infrastructure projects to stimulate employment and stabilize wages during economic downturns. They would raise taxes to cool the economy and prevent inflation when there is abundant demand-side growth.