Question

Which outcome is typically expected from a government's expansionary fiscal policy?

• A. Higher interest rates
• B. Reduced public spending and investment
• C. Increased government savings
• D. Stimulation of economic growth

Answer 1

Answer:

D. Stimulation of economic growth

• Increased Government Spending: Governments may increase spending on infrastructure projects (roads, bridges, public transport), defense, education, or healthcare. This directly injects money into the economy, creating jobs and increasing demand for goods and services.