Question

An expansionary fiscal policy will Question 4 options: always result in a budget deficit. always result in a budget surplus. sometimes result in a budget deficit. never result in a budget surplus. More information is necessary to answer this question.

Answer 1

always result in a budget deficit.

Step-by-step explanation:

Expansionary fiscal policy are policies undertaken by the government to increase the supply of money in the economy.

Tools of Expansionary fiscal policy are :

tax cuts

increased government spending

transfer payments.

A budget deficit occurs when government spending exceeds income.

If taxes are cut, revenue of the government would fall and this can lead to a budget deficit.

Also if the government increases its spending, spending can exceed income and this would lead to a deficit.

I hope my answer helps you