Which fiscal policy action is likely to stimulate economic growth?

Which fiscal policy action is likely to stimulate economic growth?

Step 1: Understand what fiscal policy is. Fiscal policy refers to the government's use of spending and taxation to influence the economy.
Step 2: Identify the two main tools of fiscal policy: government spending and taxation.
Step 3: Recognize that increasing government spending means the government is spending more money on projects, services, and programs.
Step 4: Realize that when the government spends more, it creates demand for goods and services.
Step 5: Understand that increased demand can lead to businesses hiring more workers to meet that demand.
Step 6: Conclude that more jobs mean more people have income to spend, which further stimulates the economy.
Step 7: Therefore, increasing government spending is likely to stimulate economic growth.

No concepts available.