Which Factor Is an Expansionary Fiscal Policy

question 24

Multiple Choice

Which factor is an expansionary fiscal policy?

• A) an increase in the money supply that decreases interest rates
• B) an increase in taxes that reduces the budget deficit and decreases consumption
• C) a decrease in government spending
• D) an increase in unemployment benefits

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Definitions:

Raise Taxes

The act of increasing the amount of money the government requires citizens or businesses to pay on their income, property, or purchases.

Social Security Trust

is a fund that holds the financial assets of the Social Security Administration in the United States, used to pay out benefits to retirees, disabled individuals, and survivors.

Federal Budget Deficit

The financial situation where the federal government's expenditures exceed its revenues within a particular fiscal year.

Treasury Bankrupt

A situation where the government's treasury exhausts its funds, unable to meet its financial obligations.