Which of the following statements is true about an expansionary fiscal policy?
Which of the following statements is true about an expansionary fiscal policy?
A ) It decreases demand for loanable funds.
B) It decreases the equilibrium price level.
C) It decreases the equilibrium real interest rate.
D) It increases aggregate demand.
E) It increases the money supply.
Homework Answers
D. It increases aggregate demand.
Expansionary monetary policy is increase in government spending and/or decrease in taxes leads to increase aggregate demand.
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Which of the following statements is true about an expansionary fiscal policy?
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the possible answers:
How will an expansionary fiscal policy affect exchange rates, via interest rates? Expansionary Fiscal Policy select answer select answer Competitiveness decreases Competitiveness increases The domestic currency depreciates The domestic currency appreciates Income decreases Income increases Interest rates decrease Interest rates increase Imports decrease Imports increase Price level decreases Price level increases Trade deficit decreases Trade deficit increases
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