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lisabon 2012 [21]
3 years ago
13

Economist A says all of the following: The economy needs expansionary fiscal policy to remove it from a recessionary gap. Govern

ment should either raise its _____________ or cut ___________________. I believe the government spending multiplier is ____________ than the tax multiplier, so I favor _____________________.
Business
1 answer:
lana [24]3 years ago
4 0

Answer:

The correct answer is:

Government should either raise its <u>expenditures</u> or cut<u> taxes</u>. I believe the government spending multiplier is <u>greater</u> than the tax multiplier, so I favor <u>this policy</u>.

Explanation:

To begin with, an <em>"expansionary fiscal policy" </em>represents the tool that a government has in order to give response to a recessionary context in where the economy is falling down by decreasing its production. That is why, that in this type of policy the actions that are to be taken comprehends the reduction of taxes that the public sector collects from the private sector and also to increase the public expenditures that the government has with the purpose to estimulate the demand and offer of goods.  

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