Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
To reduce unemployment
B
To increase taxes
C
To decrease government spending
D
To balance the budget
Understanding the Answer
Let's break down why this is correct
Answer
The primary goal of an expansionary fiscal policy is to stimulate economic growth, especially during times of recession or slow economic activity. This type of policy involves the government increasing its spending or cutting taxes to encourage more money to flow into the economy. For example, if the government decides to build new schools or roads, it creates jobs and allows workers to spend more money, which helps businesses thrive. By boosting demand for goods and services, expansionary fiscal policy aims to reduce unemployment and increase overall economic activity. In essence, it is about using government actions to make the economy stronger and help people find work.
Detailed Explanation
The main aim of expansionary fiscal policy is to lower unemployment. Other options are incorrect because Some might think that increasing taxes helps the economy; It's a common belief that cutting government spending is helpful.
Key Concepts
fiscal policy
Topic
Expansionary Policy and Investment
Difficulty
easy level question
Cognitive Level
understand
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