Which of the following is an example of fiscal stimulus?
A) An increase in government spending on new military jet fighters
B) An increase in consumption because of improved consumer confidence
C) An increase in personal income taxes for families with children
D) An increase in the purchase of office buildings by foreign investors

Question

Quizplus · Accepted Answer

Fiscal stimulus refers to government policies that aim to boost economic activity through increased spending. Therefore, an increase in government spending on new military jet fighters is an example of fiscal stimulus.

Option B refers to a boost in consumption, which is an effect of fiscal stimulus rather than a stimulus itself. Option C is an example of fiscal tightening, which reduces economic activity. Option D refers to foreign investment in the real estate sector, which may generate economic activity, but it is not a fiscal stimulus policy.

Which of the Following Is an Example of Fiscal Stimulus