Question

The ______policy will lead to an increase in exports and fall in imports

 A) Deflationary

 B) Inflationary

 C) Expansionary

 D) Expenditure fixing​

Answer 1

Explanation:

Expansionary

please mark as best answer and thank me please

Answer 2

The Expansionary policy will lead to an increase in exports and a fall in imports. (Option c)

By boosting government spending or cutting taxes, expansionary fiscal policy promotes aggregate demand.

This can be accomplished by the expansionary policy in the following ways:

• Increasing government purchases by increasing federal government spending on final goods and services and increasing federal grants to state and local governments to increase their expenditures on final goods and services.
• Increasing investments by increasing after-tax profits through cuts in business taxes.
• Increasing government purchases by increasing federal government spending on final goods and services and increasing federal grants to state and local governments to raise their expenses on final goods and services.

Also, Aggregate Demand (A.D) is measured through the total expenditure being incurred by all the entities in an economy.

                                 A.D = C+G+I+(X-M)

Where,

C is the consumption expenditure of households.

G is the expenditure done by the Government.

I is the investment expenditure of firms.

(X-M) is the net exports.

So, an increase in A.D will lead to an increase in net exports and fall in imports.