Question

How does the U.S. government promote economic growth? By decreasing taxes and decreasing spending By decreasing taxes and increasing spending By increasing taxes and decreasing spending By increasing taxes and increasing spending

Answer 1

Answer: By decreasing taxes and increasing spending

Explanation:

EXPANSIONARY FISCAL POLICY

This is an economic policy whereby a country, in this case the US Government, promotes economic growth by reducing taxes and increasing spending.

The reduction in taxes means that citizens have more disposable income to spend so that increases consumption in the economy. Consumption is a major factor in the composition of the GROSS DOMESTIC PRODUCT (GDP) which is a measure of the status of the economy.

Another major factor in GDP is government spending. If the government spends more in an economy, this would translate to a higher GDP as money is being poured into the economy.

So the US Government can reduce taxes and increase spending to protect economic growth.