Expansionary fiscal policy is designed to expand real GDP. This approach involves increasing government spending and/or decreasing taxes to stimulate economic growth. The primary goal is to boost aggregate demand in the economy, especially during periods of recession or economic downturn.
While it may sound similar to monetary policy, which involves expanding the money supply, fiscal policy specifically relates to government actions regarding spending and taxation. By implementing such policies, the government aims to increase employment levels and overall economic activity.
In summary, the correct aspect of expansionary fiscal policy is that it is specifically designed to encourage economic growth and expand real GDP.