Question

The expansionary fiscal policy is generally associated with a higher growth rate of GDP.

explain

Answer 1

The two types of Fiscal policy expansionary and contractionary fiscal policy expansionary fiscal policy used during the deflation situation and contractionary fiscal policy used durign depression

Expansionary Fiscal policy when the economy faces deflationary situation increasing the government expenditure and reducing the taxation, repaying the debt to the people will increase the GDP of the country and this leads to till where economy reaches the full employment.

Thus, it is clear that expansionary fiscal policy results in higher GDP of the country.