If unemployment is high and spending is sluggish, what type of fiscal policy should be enacted?
multiple choice
Expansionary fiscal policy, which includes increases in government spending or decreases in taxes, which will shift AD to the right
Contractionary fiscal policy, which includes decreases in government spending or increases in taxes, which will shift AD to the left
Expansionary fiscal policy, which includes decreases in government spending or increases in taxes, which will shift AD to the right
Contractionary fiscal policy, which includes increases in government spending or decreases in taxes, which will shift AD to the right

Question

If unemployment is high and spending is sluggish, what type of fiscal policy should be enacted?
multiple choice
Expansionary fiscal policy, which includes increases in government spending or decreases in taxes, which will shift AD to the right
Contractionary fiscal policy, which includes decreases in government spending or increases in taxes, which will shift AD to the left
Expansionary fiscal policy, which includes decreases in government spending or increases in taxes, which will shift AD to the right
Contractionary fiscal policy, which includes increases in government spending or decreases in taxes, which will shift AD to the right

Accepted Answer

***A*** ∻Key Concept∻ ⚹Expansionary Fiscal Policy⚹ ∻Explanation∻ ⚹In times of high unemployment and sluggish spending, expansionary fiscal policy is used to stimulate the economy by increasing government spending or decreasing taxes, which shifts aggregate demand (AD) to the right.⚹◊What impact does expansionary fiscal policy have on aggregate demand (AD) in a recessionary economy?⍭ Generate me a similar question◊

Sia