Question

Under what circumstances should the federal government implement expansionary fiscal policy?

Macroeconomics | minimum of 75 words

Answer 1

Expansionary fiscal policy will always increases the level of the total demand either by the increases in the spending of the government  or by the reductions in tax .

• Expansionary fiscal policy used by the government when the circumstances be like - when the economy is in the recession and also producing below its possible gross domestic product .

THE EXPANSIONARY FISCAL POLICY will also give more money to the consumers so that to give them more and more the purchasing power .

POLICY also involves the decline tax and inclination the expenditure of the government or both also so that it can fight with the pressure of the recession .