Which of the Following Is True Concerning Expansionary Fiscal Policy

question 12

Multiple Choice

Which of the following is true concerning expansionary fiscal policy?

• A)Expansionary fiscal policy is designed to control aggregate demand using increases of taxes and cuts in government spending
• B)Expansionary fiscal policy causes an outward shift of the aggregate demand curve resulting in an increase in output.
• C)Expansionary fiscal policy results in inflation when employed at relatively low levels of GDP.
• D)Expansionary fiscal policy is a last-resort policy used by the Federal Reserve System.

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