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31 March, 14:11

Expansionary fiscal policy is so named because it

a. involves an expansion of the nation's money supply.

. necessarily expands the size of government.

c. is designed to expand real GDP.

d. is aimed at achieving greater price stability.

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Answers (1)
  1. 31 March, 14:37
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    c. is designed to expand real GDP.

    Explanation:

    Expansionary fiscal policy is the policy of increasing government spending to stimulate demand and thus expand real GDP.

    It is often used when the economy is in recession, where people don't spend so there is not enough demand = > cut down in supply (below capacity output/GDP) = > job loss = > less income = > even less spending (demand) and so on.
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