When we speak of expansionary fiscal policy,we are talking about policymakers __________ government spending,or __________ taxes,or both.
A) decreasing; decreasing
B) increasing; increasing
C) increasing; decreasing
D) decreasing; increasing

Question

Quizplus · Accepted Answer

Expansionary fiscal policy is aimed at increasing aggregate demand and economic growth. This can be achieved by increasing government spending, reducing taxes, or a combination of both. Therefore, increasing government spending and decreasing taxes are the key components of expansionary fiscal policies. Option C perfectly describes the expansionary fiscal policy actions.

When We Speak of Expansionary Fiscal Policy,we Are Talking About