Economics Fiscal Policy Questions
Expansionary fiscal policy refers to the use of government spending and taxation policies to stimulate economic growth and increase aggregate demand. It involves increasing government spending, reducing taxes, or a combination of both, with the aim of boosting consumer and business spending, increasing investment, and ultimately stimulating economic activity. The goal of expansionary fiscal policy is to create a favorable economic environment by increasing disposable income, encouraging consumption, and promoting investment, which can lead to increased employment, higher output, and overall economic expansion.