Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase government revenue
B
Stimulate economic growth
C
Reduce inflation
D
Decrease national debt
Understanding the Answer
Let's break down why this is correct
Answer
A primary objective of implementing tax cuts as part of expansionary fiscal policy is to stimulate economic growth. When the government reduces taxes, people have more money to spend. This extra money can lead to increased consumer spending, which helps businesses grow and can create new jobs. For example, if a family receives a tax cut, they might decide to buy a new car or go on vacation, which then supports car dealerships and travel agencies. Overall, the goal is to boost economic activity and help the economy recover during a downturn.
Detailed Explanation
Tax cuts put more money in people's pockets. Other options are incorrect because Some think tax cuts increase government money; People might believe tax cuts lower prices.
Key Concepts
Tax cuts
Topic
Expansionary Fiscal and Monetary Policies
Difficulty
easy level question
Cognitive Level
understand
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