Question

Expansionary spending takes place when a government makes the decision to
Responses

raise spending to stimulate the economy.
raise spending to stimulate the economy.

raise taxes to run a budget surplus.
raise taxes to run a budget surplus.

put a freeze on the number of its employees.
put a freeze on the number of its employees.

raise taxes to balance its budget.
raise taxes to balance its budget.
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Practice Test


10 of 18

Answer 1

raise spending to stimulate the economy.

(Expansionary fiscal policy involves increasing government spending and/or cutting taxes to boost aggregate demand.)