10
QuizMultiple Choice

Fiscal Policy: Taxes — Quiz

Question 10 • Economics

Under an expansionary taxation policy, the government tries to stimulate economic growth by

Answer
A
reducing spending.
B
reducing taxes.
C
reducing deficits.
D
reducing demand.

Explanation

An expansionary taxation policy aims to encourage households and businesses to spend and invest more. Reducing taxes leaves people and businesses with more money to spend, which can increase demand and economic growth. Therefore, the correct choice is reducing taxes.

AI-written and checked against the verified answer.

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