Which of the following is expansionary fiscal policy, such as a decrease in taxes or increase in government spending, likely to cause?

Question

Which of the following is expansionary fiscal policy, such as a decrease in taxes or increase in government spending, likely to cause?

A. Increase in consumer and business spending

B. Increase in consumer savings rate

C. Decrease in consumer and business spending

D. Decrease in government spending

Answer 1

A. Increase in consumer and business spending

Answer 2

is this right

Answer 3

Yes, that is correct. Expansionary fiscal policy, such as a decrease in taxes or an increase in government spending, is likely to increase consumer and business spending as it provides a boost to the economy and encourages individuals and businesses to spend more.