객관식
In the context of expansionary and contractionary fiscal policy, the intent of contractionary fiscal policy is to:
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19. Fiscal Policy
Expansionary and Contractionary Fiscal Policy
객관식
What is expansionary fiscal policy?
A
Government decreases spending and/or increases taxes to reduce aggregate demand and control inflation.
B
Government imposes price controls and wage freezes to directly control inflation.
C
Government increases spending and/or decreases taxes to raise aggregate demand and boost output.
D
Central bank lowers interest rates and buys bonds to increase the money supply and stimulate investment.
검증된 단계별 안내1
Understand that expansionary fiscal policy is a tool used by the government to stimulate economic activity, especially during periods of recession or low growth.
Recognize that expansionary fiscal policy involves increasing aggregate demand by either increasing government spending or decreasing taxes, which puts more money into the hands of consumers and businesses.
Note that increasing government spending directly raises demand for goods and services, while decreasing taxes increases disposable income, encouraging higher consumption and investment.
Distinguish expansionary fiscal policy from contractionary fiscal policy, which does the opposite (decreasing spending or increasing taxes) to reduce aggregate demand and control inflation.
Remember that expansionary fiscal policy is different from monetary policy, which involves central bank actions like lowering interest rates or buying bonds to influence the money supply and investment.
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