How will Expansionary Fiscal Policy affect the Federal Budget? A budget surplus will decrease the national debt Deficit spending will decrease the national debt Deficit spending will increase the national debt A budget surplus will increase the national debt

How will Expansionary Fiscal Policy affect the Federal Budget? A budget surplus will decrease the national debt Deficit spending will decrease the national debt Deficit spending will increase the national debt A budget surplus will increase the national debt

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter24: Fiscal Policy

Section: Chapter Questions

Problem 1P

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Concept explainers

Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.

Question

100%

EXPANSIONARY FISCAL POLICY
20%
GOVERNMENT
SPENDING
80%
TAKATION
Gvemme Spnding
Taationmater than
pter than tation
apud
How will Expansionary Fiscal Policy affect the Federal
Budget?
A budget surplus will decrease the national
debt
Deficit spending will decrease the national
debt
Deficit spending will increase the national
debt
A budget surplus will increase the national
debt

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