Question

Which best describes how expansionary policies can facilitate economic growth?

Answer 1

Depending on the expansionary policy, economic potential of a country can grow for various reasons, or it can even be lowered. An example of such a policy can be cutting taxes for business owners. This enables them to give jobs to more people since they can use the extra money to produce more, which increases the country's GDP and facilitates economic growth.

Answer 2

I believe the answer is: They increase disposable income.

Expansionary policies is being done by expanding money supply and cutting the income tax that must be paid by the citizens.

This would increase the amount of money that they could use for consumption (disposable income) which would encourage the growth of many business establishments.