Government and the Economy Unit Test

Question

Government and the Economy Unit Test
6 of 176 of 17 Items

Question
How do the instances when expansionary fiscal policy should be used compare with those for contractionary fiscal policy?(1 point)
Responses

Expansionary fiscal policy should be used to combat high inflation and contractionary fiscal policy should be used to increase government revenue.
Expansionary fiscal policy should be used to combat high inflation and contractionary fiscal policy should be used to increase government revenue.

Expansionary fiscal policy should be used to increase government revenue and contractionary fiscal policy should be used to increase consumer spending.
Expansionary fiscal policy should be used to increase government revenue and contractionary fiscal policy should be used to increase consumer spending.

Expansionary fiscal policy should be used to increase the unemployment rate and contractionary fiscal policy should be used when economic growth is too fast.
Expansionary fiscal policy should be used to increase the unemployment rate and contractionary fiscal policy should be used when economic growth is too fast.

Expansionary fiscal policy should be used during recessions to help build the economy and contractionary fiscal policy should be used when there is high inflation.
Expansionary fiscal policy should be used during recessions to help build the economy and contractionary fiscal policy should be used when there is high inflation.
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GPT-4o mini · Answer

The correct response to how the instances when expansionary fiscal policy should be used compare with those for contractionary fiscal policy is:

Expansionary fiscal policy should be used during recessions to help build the economy and contractionary fiscal policy should be used when there is high inflation.

This accurately reflects the purposes of these policies: expansionary fiscal policy is designed to stimulate economic activity, often during economic downturns, while contractionary fiscal policy is used to reduce inflation and cool down an overheated economy.