An example of fiscal stimulus policy is
A) the automatic increase in needs-tested spending during a recession.
B) induced taxes.
C) decreasing government expenditure.
D) decreasing needs-tested spending.
E) cutting taxes.

Question

Quizplus · Accepted Answer

Cutting taxes is an example of fiscal stimulus policy. This policy involves reducing taxes in order to increase disposable income, which in turn leads to an increase in consumer spending and investment, thereby stimulating economic growth.

An Example of Fiscal Stimulus Policy Is