PRC-3 · Chapter 16 · Question 16 of 20
To pull the economy out of a severe depression, the Ministry of Finance slashes national income taxes and spends billions building public motorways. This specific macroeconomic intervention is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Expansionary Fiscal Policy
Explanation
Fiscal policy involves altering government spending and taxation. Increasing spending and cutting taxes to boost aggregate demand is expansionary.
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