Multiple choice

Which of the following is not an expansionary fiscal policy?

  1. Decrease in tax rates

  2. Increase in transfer payments

  3. Borrowing debt from public

  4. Increase in government expenditure
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

It is not an expansionary fiscal policy. When the debt is borrowed from public, supply of money will be transferred from the hands of public to the government. Hence, the funds or cash in the hands of public will be decreased. Thus, it is not an expansionary fiscal policy.

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