What is the main goal of expansionary fiscal policy?
A. To reduce consumer spending
B. To slow down economic growth
C. To stimulate economic activity during a recession
D. To increase the value of the national currency
Answer (2)
The correct answer is letter C. To stimulate economic activity during a recessionExpansionary fiscal policy is when the government increases spending or reduces taxes to boost the economy. The goal is to encourage more spending and investment, especially during a recession when private sector activity is low.In the Philippines, an example of expansionary fiscal policy was the "Bayanihan to Heal as One Act" during the COVID-19 pandemic. The government provided cash subsidies, food packs, and support to small businesses. These actions were meant to keep the economy alive and support people who lost jobs or income. By giving people more money to spend, the government hoped to prevent the economy from crashing further.
The answer is C. To stimulate economic activity during a recession. Expansionary fiscal policy is when the government increases spending or reduces taxes to boost the economy. The goal is to encourage more spending and investment, especially during a recession when private sector activity is low.In the Philippines, an example of expansionary fiscal policy was the "Bayanihan to Heal as One Act" during the COVID-19 pandemic. The government provided cash subsidies, food packs, and support to small businesses. These actions were meant to keep the economy alive and support people who lost jobs or income. By giving people more money to spend, the government hoped to prevent the economy from crashing further.
