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Contractionary fiscal policy increases spending while expansionary fiscal policy decreases spending
A. True
B. False


Sagot :

Answer: False

Explanation:

Contractionary Fiscal policy is done when the government wants to reduce economic activity. To that end they embark on measures aimed at reducing how much people have in the economy.

They will do so by either increasing taxes, reducing spending, or both. Expansionary Fiscal policy on the other hand involves increasing spending and/ or reducing taxes so that people have more money to spend in the economy.