Question

Under an expansionary taxation policy, the government tries to stimulate economic growth by

A: reducing deficits.
B: reducing taxes.
C: reducing demand.
D: reducing spending.

Answer 1

Under an expansionary taxation policy, the government tries to stimulate economic growth by

**B: reducing taxes.**

Reducing taxes allows individuals and businesses to keep more of their income, which can lead to increased spending and investment, ultimately stimulating economic growth.