How do the instances when expansions fiscal policy should be used compare with those for contractionary fiscal policy?

Question

A. 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.
B. Expansionary fiscal policy should be used to combat high inflation and contractionary fiscal policy should be used to increase government revenue.
C. Expansionary fiscal policy should be used to increase the unemployment rate and contractionary fiscal policy should be used when economic growth is too fast.
D. Expansionary fiscal policy should be used to increase government revenue and contractionary fiscal policy should be used to increase consumer spending.

Answer 1

The correct answer is:

A. 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 is typically implemented during periods of economic downturns or recessions to stimulate economic growth, often through increased government spending and/or tax cuts. On the other hand, contractionary fiscal policy is used during periods of high inflation to cool off the economy and stabilize prices, typically involving decreased spending and/or increased taxes.