Question

The primary purpose of a "fiscal stimulus" package is to:

• A. Reduce government spending to control inflation.
• B. Implement protectionist trade policies to safeguard domestic industries.
• C. Balance the national budget through austerity measures.
• D. Increase government spending or lower taxes to boost a sluggish economy.

Answer 1

Answer:

D. Increase government spending or lower taxes to boost a sluggish economy.

• A fiscal stimulus is an expansionary fiscal policy designed to spur economic growth by increasing aggregate demand.