Which of the following is considered expansionary fiscal policy?
A) Congress decreases the income tax rate.
B) Congress increases defense spending.
C) Legislation increases a college tuition deduction from federal income taxes.
D) The Arizona legislature cuts highway spending to balance its budget.
Answer: A
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What will be an ideal response?
An increase in the money supply will affect aggregate demand
A) only if the increase in the money supply causes interest rates to rise. B) only if the increase in the money supply causes people to buy less goods and services. C) only if the increase in the money supply causes people to increase their saving. D) if the increase in the money supply causes interest rates to fall and/or causes people to buy more goods and services.