18、An expansionary fiscal policy is most likely to include a(n):

A. increase in both government expenditures and tax rates.

B. decrease in both government expenditures and tax rates.

C. increase in government expenditures and a decrease in tax rates.

D. decrease in government expenditures and an increase in tax rates.

[此贴子已经被作者于2008-11-7 13:36:26编辑过]

18、An expansionary fiscal policy is most likely to include a(n):

A. increase in both government expenditures and tax rates.

B. decrease in both government expenditures and tax rates.

C. increase in government expenditures and a decrease in tax rates.

D. decrease in government expenditures and an increase in tax rates.

  
Correct answer = C

"Fiscal Policy," Michael Parkin
2008 Modular Level I, Vol. 2, pp. 449-451
Study Session 6-27-d, e
discuss the use of fiscal policy to stabilize the economy, including the effects of the government purchases multiplier, the tax multiplier, and the balanced budget multiplier;
explain the limitations of discretionary fiscal policy, and differentiate between discretionary fiscal policy and automatic stabilizers
An expansionary fiscal policy means that government increases its purchases of goods and services and/or cuts tax rates to expand or create a budget deficit. 

c

thx

d