Expansionary

问题如下：

QuestionWhich action exemplifies expansionary fiscal policy?

选项：

A.

Raising sales tax rates

B.

Reducing interest rates

C.

Investing in public infrastructure projects

解释：

Solution

1. False. Implementing expansionary fiscal measures typically involve actions such as... reductions in sales taxes to decrease prices, thus enhancing real incomes and boosting consumer demand. Conversely, increasing sales taxes is contractionary.
2. False. While a reduction in interest rates might be considered expansionary, it's a component of monetary policy, not fiscal policy. Central banks might cut their benchmark interest rates to infuse liquidity when the economy is facing a downturn.
3. True. One way fiscal policy can impact aggregate demand is through... expansionary initiatives like government investments in public infrastructure and social goods.

Fiscal Policy

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