One of the implications of ongoing use of expansionary fiscal policy is that it would:
A) allow an unemployment rate of zero to be maintained.
B) lead net exports to be a smaller and smaller portion of overall economic activity.
C) allow the government to prevent crowding out.
D) prevent the government from always maintaining a balanced budget.

Question

Quizplus · Accepted Answer

Expansionary fiscal policy, which involves government spending exceeding tax revenues, often leads to increased public debt. This makes it challenging for the government to maintain a balanced budget, as funds may need to be allocated to service debt, limiting the ability to balance expenditures and revenues.

One of the Implications of Ongoing Use of Expansionary Fiscal