A government decides to increase its spending on infrastructure projects while simultaneously raising taxes on high-income earners. Which category best describes the government's approach regarding fiscal policy and its potential impact on national debt?

The government's decision to increase spending on infrastructure projects is an example of expansionary fiscal policy. This means they are trying to boost the economy by investing in things like roads, bridges, and public transport, which can create jobs and improve services. At the same time, raising taxes on high-income earners helps to collect more revenue, which can offset some of the spending and reduce the need to borrow money. By balancing increased spending with higher taxes, the government aims to stimulate growth without significantly increasing national debt. For example, if the government spends $1 billion on a new highway while collecting an additional $500 million from wealthier citizens, it can help improve the economy while managing its budget more effectively.