What is the primary goal of expansionary fiscal policy?

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Question: What is the primary goal of expansionary fiscal policy?

Options:

Correct Answer: To decrease unemployment

Solution:

The primary goal of expansionary fiscal policy is to decrease unemployment by increasing government spending and/or cutting taxes.

What is the primary goal of expansionary fiscal policy?

What is the primary goal of expansionary fiscal policy?

Step 1: Understand what expansionary fiscal policy means. It is a way for the government to boost the economy.
Step 2: Know that the government can boost the economy by spending more money or by reducing taxes.
Step 3: Recognize that the main aim of this policy is to create more jobs.
Step 4: Realize that when the government spends more or cuts taxes, people have more money to spend.
Step 5: Understand that when people spend more money, businesses can hire more workers, which helps reduce unemployment.

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