Question

Identify each scenario as an example of expansionary fiscal policy, contractionary fiscal policy, or not an example of fiscal policy. a. An increase in the money supply is fiscal policy. b. A decrease in taxes is fiscal policy.

Answer 1

Based on the tenets of fiscal policy, the following are true:

• An increase in money supply is not an example of fiscal policy.
• A decrease in taxes is expansionary fiscal policy.

What is fiscal policy?

Fiscal policy refers to things that the government does in order to influence the economy through spending and taxation.

When there is a decrease in taxes for instance, this is expansionary fiscal policy as the government is trying to increase the amount that people have to spend.

Find out more on fiscal policy at brainly.com/question/6583917.