If the government lowered taxes so that people would get more money in their paychecks, the government is using what kind of policy?

a) expansionary

b) contractionary

c) exceptionary

d) neutral

Question

Business

Fiona Gilmore

9 January, 00:59

If the government lowered taxes so that people would get more money in their paychecks, the government is using what kind of policy?

a) expansionary

b) contractionary

c) exceptionary

d) neutral

+4

Answers (1)

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Aileen Levine · Answer 1

Answer: Option A

Explanation:

The government takes up expansionary policy to reduce the taxes, transfer payments and rebates. Also the government invests more money in the infrastructure of the country. By this way the income of the people is increased as they have only few deductions from their income. Government also increases the aggregate demand by this way.

The government's discretionary spending is increased to increase the money flow by signing many government contracts. The recession in the country can be prevented with this policy.

If the government lowered taxes so that people would get more money in their paychecks, the government is using what kind of policy?a) expansionaryb) contractionaryc) exceptionaryd) neutral

If the government lowered taxes so that people would get more money in their paychecks, the government is using what kind of policy?

a) expansionary

b) contractionary

c) exceptionary

d) neutral