Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
To increase national debt
B
To stimulate economic growth
C
To reduce tax revenue
D
To control inflation
Understanding the Answer
Let's break down why this is correct
Answer
The primary purpose of government spending in fiscal policy is to influence the economy by managing the levels of demand and employment. When the government spends money, it can create jobs and increase demand for goods and services, which helps to stimulate economic growth. For example, if the government builds new schools, it not only provides jobs to construction workers but also improves education for children, leading to a stronger future workforce. Additionally, during times of economic downturn, increased government spending can help to boost consumer confidence and encourage spending by households. Overall, effective government spending aims to stabilize the economy and support citizens' well-being.
Detailed Explanation
Government spending helps boost the economy. Other options are incorrect because Some might think spending increases debt; It's a common belief that spending reduces tax income.
Key Concepts
Government spending
Topic
Fiscal Policy and National Debt
Difficulty
easy level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.