📚 Learning Guide
Expansionary Fiscal and Monetary Policies
easy

During a recession, the government may implement __________ to stimulate economic growth, which typically involves increasing spending or cutting taxes.

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

expansionary fiscal policy

B

contractionary monetary policy

C

restrictive fiscal policy

D

expansionary trade policy

Understanding the Answer

Let's break down why this is correct

Answer

During a recession, the government may implement expansionary fiscal policies to stimulate economic growth. This means that the government can either increase its spending on projects like building roads or schools, or it can cut taxes to give people more money to spend. For example, if the government decides to build a new highway, it creates jobs for construction workers and gives those workers money to spend in their communities. This extra spending helps businesses and can lead to more hiring, which boosts the economy. By using these policies, the government aims to get money flowing and encourage people to spend more, helping the economy recover.

Detailed Explanation

This policy helps boost the economy by increasing government spending or lowering taxes. Other options are incorrect because This approach actually slows down the economy; This means cutting government spending or raising taxes, which can hurt the economy.

Key Concepts

Expansionary Fiscal Policy
Aggregate Demand
Economic Recession
Topic

Expansionary Fiscal and Monetary Policies

Difficulty

easy level question

Cognitive Level

understand

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