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Fiscal Policy: Spending

Question 17 • IL-Economics

An expansionary fiscal policy can the number of jobs and can inflation and reduce interest rates.

Answer
A
increase
B
reduce

Explanation

Expansionary fiscal policy increases government spending or cuts taxes, which raises overall demand in the economy. Businesses may hire more workers to meet that demand, so it can increase the number of jobs. The correct choice is “increase.”

AI-written and checked against the verified answer.

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