some one please answer this for me.. im begging :(?

Question

An example of expansionary fiscal policy would be cutting?

a. taxes
b. government spending
c. production of consumer goods
d. prices of consumer goods

Answer 1

Discretionary fiscal policy involves deliberate changes in taxes (tax rates) and government spending by Congress to promote full-employment, price stability, and economic growth. The tools of Fiscal Policy are:
a. government purchases (spending)
b. taxes
c. both

Expansionary Fiscal Policy involves:
* An increase in government expenditures for goods and services,
* a decrease in taxes, or
* some combination of the two

Contractionary Fiscal Policy involves:
* A decrease in government expenditures for goods and services,
* an increase in net taxes, or
* some combination of the two.

Answer 2

from wikipedia (does noone in answers know how to use it):- An expansionary stance of fiscal policy involves a net increase in government spending (G > T) through a rise in government spending or a fall in taxation revenue or a combination of the two. This will lead to a larger budget deficit or a smaller budget surplus than the government previously had a balanced budget. Expansionary fiscal policy is usually associated with a budget deficit.

So the answer must be (a)

Answer 3

The 2 main instruments of fiscal policy are taxes and government spending.

And expansionary policy tends/aims to increase output. Hence if you CUT taxes or Increase Government Spending, then you are injecting money into the economy, an expansionary move.

The answer is A.

The government does not have direct control over production of goods in a market economy, neither does it have control over price.

But if it cust taxes, people have moer to spend, consumption rises, hence this shifts demand curve right, causing prices and output to rise.

Often, production of price are the targets of policies (price in terms of inflation targets).

Answer 4

Cutting taxes would encourage industry's to expand and invest .hence .increasing production .in turn .increase in workforce .minimizing unemployment ..A is the answer

Answer 5

I agreed that the answer is A. Good luck