5
QuizMultiple Choice

Fiscal Policy: Taxes — Quiz

Question 5 • Personal Finance and Economics

Which best describes how expansionary policies can facilitate economic growth?

Answer
A
They increase disposable income.
B
They prompt decreased demand.
C
They help reduce consumer debt.
D
They inspire consumer confidence.

Explanation

Expansionary policies, such as tax cuts or increased government spending, put more money into the economy. This can increase households’ disposable income, allowing consumers to spend more and businesses to expand, supporting economic growth. Decreased demand would work against growth, and reducing consumer debt is not the main direct effect.

AI-written and checked against the verified answer.

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