If the government cut expenditures during an expansion
A)it would have to raise the tax rate
B)it would tend to stabilize the economy
C)both a and b
D)neither a nor b

Name: If the government cut expenditures during an expansion A)it would have to raise the tax rate B)it would tend to stabilize the economy C)both a and b D)neither a nor b
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Question

Quizplus · Accepted Answer

Government spending is an expansionary fiscal policy. Cutting expenditures during an expansion would reduce aggregate demand and help stabilize the economy.

If the Government Cut Expenditures During an Expansion