Nweze9669 Nweze9669

19-12-2022
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During a recession, if a government uses an expansionary fiscal policy to increase gdp, the?

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rekharaypriti8910 rekharaypriti8910

23-12-2022

During a recession, if a government uses an expansionary fiscal policy to increase GDP, the aggregate demand curve will shift to the right.

A recession is a period of decline in the economy. there is a recession if the GDP of two consecutive quarters is negative.

expansionary fiscal policy are steps taken by the government to increase the money supply in the economy. they include :

1. reducing taxes

2. increasing government spending.

reducing taxes would increase disposable income and aggregate spending would rise.

increased government spending would increase the money supply in the economy and demand would increase.

increased demand would lead to a rightward shift of the aggregate demand curve

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