Question

Fiscal policy has most likely been rather activist and expansionary in recent months, perhaps years? True...

Fiscal policy has most likely been rather activist and expansionary in recent months, perhaps years? True or false, Followed by a brief statement explaining your rationale.

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Answer #1

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True, Fiscal policy in the recent months has most likely been expanisionary in nature.

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Expansionary fiscal policy is a form of fiscal policy that involves decreasing taxes, increasing government expenditures or both, in order to fight recessionary pressures. A decrease in taxes means that households have more disposal income to spend. In the last few months demand has fallen considerably due to the covid-19 situation all arround the world and we are on a verge of recession, To fight recession government increase there spending or decrease the taxes which has multiplier effect and helps to fight recessionary pressures. So in the recent months fiscal policy has been rather activist and expansionary in nature.

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