Question

Expansionary fiscal policy is used in order to ______ the economy.

-reduce GDP in
-increase interest rates in
-reduce inflation in
-stimulate
-increase unemployment in

Answer 1

Expansionary fiscal policy is used to stimulate the economy by increasing government spending or reducing taxes.

Step-by-step explanation:

Expansionary fiscal policy is used to stimulate the economy. It involves increasing government spending or reducing taxes in order to boost aggregate demand. This helps to increase economic output and decrease unemployment during a recession.