Which of the following would be an example of an expansionary fiscal policy?
A)An increase in taxes
B)A decrease in government purchases
C)An increase in government purchases
D)An increase in the reserve requirement ratio
E)An increase in the discount rate

Question

Quizplus · Accepted Answer

An increase in government purchases is an expansionary fiscal policy because it increases government spending, which in turn can increase aggregate demand and stimulate economic growth. Options A, D, and E represent contractionary fiscal policies, while option B is a neutral policy choice.

Which of the Following Would Be an Example of an Expansionary