Which of the following might be considered the most expansionary set of fiscal policies?
a. Increase government purchases, increase in taxes.
b. Increase in government purchases, increase in the money supply.
c. Decrease in taxes, increase in the money supply.
d. Increase government purchases, decrease in taxes.
答案：D
Explanation
Choice "d" is correct. Expansionary fiscal policy involves increasing government purchases and/or decreasing taxes. Both increases in government spending and decreases in taxes cause the aggregate demand curve to shift right and thus cause real GDP (output) to increase.
Choice "a" is incorrect. An increase in taxes is an example of contractionary fiscal policy.
Choice "c" is incorrect. An increase in the money supply is expansionary monetary policy (not fiscal policy).
Choice "b" is incorrect per above explanation.
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