An expansionary fiscal policy will
A) always result in a budget deficit.
B) always result in a budget surplus.
C) sometimes result in a budget deficit.
D) never result in a budget surplus.
E) More information is necessary to answer this question.

Question

Quizplus · Accepted Answer

An expansionary fiscal policy may involve increased government spending or decreased taxes in order to stimulate economic growth. This can result in a budget deficit if the government is spending more than it is receiving in revenue. However, it is not always the case as it depends on the level of economic growth and revenue generated from various sources. Therefore, option C is the most accurate answer.

An Expansionary Fiscal Policy Will