Question

What is the effect of an expansionary fiscal policy upon an economy with an increasing budget deficit and growing national debt?

Answer 1

Answer:

increased deficit spending and increasing or growing national debt

Explanation:

If expansionary fiscal policy continues in an economy with an increasing budget deficit and a growing national debt, such an economy will experience high inflation. Expansionary fiscal policy means an increase in government spending. In other words, fiscal policy is when the government commits or spends more money on infrastructure or other budget items or lower taxes that lead to an increase …