When the government employs a combination of higher spending and lower taxes, this type of policy is called an:
A) expansionary exchange rate policy.
B) expansionary trade policy.
C) expansionary monetary policy.
D) expansionary fiscal policy.
E) confused policy.

Question

Quizplus · Accepted Answer

This combination of higher government spending and lower taxes is aimed at stimulating economic growth, which is a characteristic of expansionary fiscal policy. Expansionary fiscal policy is used to increase the amount of money in the economy and encourage economic activity.

When the Government Employs a Combination of Higher Spending and Lower